Since July 2022, super funds have been required:

1. To have a strategy for maximising their members’ retirement income, while balancing flexible access to their retirement savings with the risk of running out.
2. To review the success of their strategy.
3. To gather the necessary information.

ASIC and APRA conducted surveys in 2023 and 2024 to track how the super industry is approaching retirement incomes. The regulators believe there are three core focus areas:

1. Understanding member needs
2. Designing fit-for-purpose assistance
3. Overseeing strategy implementation.

APRA will be contacting some super funds to address specific concerns. ASIC and APRA have seen progress being made on understanding member needs. Most funds are doing this by collating and interrogating existing data. Concerns over privacy and costs are major factors impeding how funds gather additional information to understand member retirement needs.

ASIC and APRA believe there has been a lack of progress in how funds measure the success of their retirement income strategies.  The regulators want to see better ‘success metrics’ being used. Success metrics should be applied (separately) to all cohorts covered by a fund’s retirement income strategy. 

Recently observed success metrics include:

1. % of members achieving adequate retirement income
2. Pension drawdowns vs estimated adequate drawdowns
3. % of eligible members converting accumulation accounts into retirement accounts 
4. Balance remaining at death.

Most funds are improving retirement assistance via information and calculators. Targeted cohort communications are viewed as better practice. Uncertainty over financial advice law reforms is a major factor impeding how super funds assist members with retirement.