It’s an enviable record no other listed company can match. For more than 120 years, through major conflicts and economic upheaval, this diversified investment house has always kept shareholders top of mind, not missing a beat on the dividend front since listing in 1903.
APRA-regulated funds, especially profit-for-member funds, have had a good innings during the accumulation phase. It’s proving a different story in the decumulation phase with a growing number of members demanding a far more nuanced service.
Retirees could benefit from proposed superannuation reforms
The growing number of baby boomers heading into retirement could benefit from a raft of reforms aimed at overhauling the retirement phase of superannuation.
The reform package, announced by Treasurer Jim Chalmers at the Association of Superannuation Funds of Australia (ASFA) national conference, will focus on four critical areas to strengthen retirement outcomes – enhanced independent guidance, better retirement products, best practice principles and increased transparency (see below).
“Our reforms will give retirees more peace of mind, help them make their super go further and provide more support to navigate retirement,” Chalmers told conference delegates. “We are working to ensure there is as much of a policy and product focus on the retirement phase as there is on the accumulation phase.
“These changes will empower more Australians to make the most of their superannuation through more trusted information, better products and greater transparency, ensuring super delivers on its foundational promise of providing a dignified retirement.”
Reform package:
• Enhanced independent guidance: The government will expand and refresh resources on the Moneysmart website, ensuring retirees have easy access to independent, reliable information on superannuation and retirement options.
• Better retirement products: By improving the innovative income stream regulations, the reforms will support innovation in quality retirement products, giving members more options that meet their needs and helping them make the most of their super. The updated regulations will start from July 1, 2026.
• Best practice principles: A new set of voluntary best practice principles will guide the industry to design modern, high-quality income products that support Australians’ financial security in retirement. Consultation on draft principles to begin in 2025.
• Increased transparency: A new reporting framework on retirement outcomes will offer members greater transparency and create common understanding for success in the retirement phase.
The tinning of Chalmers’ address could not have been more propitious with industry funds, in particular, in the spotlight for lacklustre service and dubious governance structures, highlighted by ASIC’s decision to file civil penalty proceedings against construction industry fund Cbus for allegedly failing to “act efficiently, honestly and fairly in handling of claims for death benefits and TPD insurance”.
There is mounting concern across the superannuation industry that the Cbus allegations could herald further revelations as industry funds struggle to adapt to an environment where there is an increasing number of retiree members with greater service demands.
Given the close historical links between the Labor Government and industry funds, and the potential for political fallout if other service and governance failures emerge at other funds, Chalmers must have breathed a sigh of relief when the reform package was largely welcomed across the industry.
ASFA said the timing was right to improve the policy settings and grow innovation in the retirement offerings for members, and by focusing on both guidance and innovation, the government was helping to ensure that superannuation funds can better meet the diverse needs of retirees.
Mary Delahunty (pictured), chief executive officer of ASFA, said clearer guidance and tools such as Moneysmart would empower fund members to engage more actively with their super, ultimately leading to better retirement outcomes.
“Super funds have shouldered a lot of the responsibility for educating Australians – we welcome an increased effort from the government in this area because it is so important in helping people make good decisions.
“ASFA is pleased to see the government’s commitment to ensuring tangible retirement outcomes for Australians. These reforms build on the Retirement Income Covenant, providing greater confidence in the value that superannuation delivers.”
Patricia Sparrow, chief executive officer of the seniors advocacy organisation COTA Australia, said that these changes were about ensuring that after saving their whole lives for retirement, Australians could live post their working lives in the manner they wanted and deserved.
“It’s hard for people to know what to do in planning for, and managing, the retirement phase of their lives. The system is complex to navigate and overwhelming for many people. It’s important we change that, and these measures are a good step towards making that easier for everyone.”
The Financial Services Council (FSC) stressed that as these principles were developed, it was important they recognise the range of consumers’ needs in retirement and diversity of retirement products.
“Product features are only one aspect of ensuring good retirement outcomes,” Blake Briggs, chief executive officer of the FSC, said. “A good offering should also encompass the services the fund offers, such as guidance and financial advice, and how the fund’s service levels deliver for customers.”
FSC research has found there will be a 70 per cent growth in the number of Australians with complex financial affairs in 25 years’ time.
“The current approach of one size fits all to superannuation regulation adversely impacts engaged consumers and the FSC welcomes the opportunity to work with Treasury and APRA on reforms to the retirement system that recognise the personalised nature of retirement.”
