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 review1 identified a lack of urgency by trustees in embracing the intent of the Retirement Income Covenant.
As part of a follow-up survey of the broader superannuation industry, APRA and ASIC asked trustees to share their response to the recommendations and findings from the thematic review to assist members who are retired or approaching retirement as required under the covenant introduced in 2022.
Key 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.
APRA Deputy Chair Margaret Cole said: “The most concerning finding from this survey is the lack of progress being made by trustees in tracking the success of their strategies, especially as this was highlighted as one of the key areas in need of improvement in the thematic review report.
“Without effective success metrics, how can trustees know that their strategies are working? Members deserve better.”
ASIC Commissioner Simone Constant added: “Trustees have a pivotal role to play in improving retirement outcomes for their members, with approximately three million Australians expected to join the six million already eligible to access their superannuation savings over the coming decade.2
“Pleasingly, trustee responses to the survey indicate they are pushing ahead with work to refine their strategy implementation. However, we expect trustees to assess gaps and identify opportunities to accelerate progress in closing these gaps, including by leveraging examples of progress outlined in this industry update.”
A copy of the industry update is available at: Industry update – Pulse check on retirement income covenant implementation.
