Research from Investment Trends found an estimated 900,000 members left a super fund in the past 12 months, representing 7 per cent of the member population.
This is down from the 11 per cent spike recorded last year and the lowest rate of switching in the past seven years.
The research also found that the overwhelming majority of Australians believe their superannuation will not be enough.
Investments Trends says its research shows that Australians’ anxiety over funding their retirement is growing as doubt the longevity of their super balances.
“Less than one in ten members say they are very confident they can finance their preferred retirement lifestyle from their super. The current uncertainty on super regulation is certainly not helping allay members’ growing angst about their retirement future,” Investment Trends senior analyst King Loong Choi said.
The report also revealed that members’ expected long-term returns fell to 8.2 per cent per annum, down from 9.2 per cent.
Millennials were found to be a major driver of change in the industry, the survey of 20,800 members found.
While younger members tend to be detached from their superannuation, those who do engage desire a wide range of channels to do so.
“Gen Ys who care to engage with their super want to access it the same way they access all the other services they use, including via social media and online chat services,” Mr Choi said.
The report concluded that super funds should seriously consider the expense, as the competition to retain members becomes fiercer.