Australia: Super funds show only incremental progress in measuring retirement income strategies
Source: Asia Insurance Review | Aug 2024
The Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) are calling on superannuation trustees to boost efforts to track and measure the impact of their strategies to improve retirement outcomes for members.
A recent pulse check has shown that while trustees have made good progress, some significant gaps remain a year after a joint APRA and ASIC thematic review identified a lack of urgency by trustees in embracing the intent of the retirement income covenant.
Observations from 48 survey responses, representing all trustees invited to participate, include:
While approximately three quarters of trustees indicated that measuring retirement outcomes was a priority, only incremental progress had been made to measure and track retirement income strategies. Just eight trustees said tracking the effectiveness of retirement-focused assistance to members was a priority.
Many trustees were taking steps to better understand the retirement needs of their members and had endeavoured to promote the availability and access to retirement-focused information for members. However, only one in five planned improvements identified by trustees were expected to be completed by mid-2024.
The responses from trustees pointed to several challenges in implementing the covenant, including uncertainty around the financial advice framework, privacy, security, and cost concerns on collecting more member data, and a lack of member engagement and financial capability. A