An ASIC review has identified superannuation trustees are demonstrating a “lack of urgency” around improving their retirement communication.
ASIC’s review, Report 818 From superficial to super engaged: Better practices for trustee retirement communications, found some trustees offer one-size-fits-all all retirement communications aimed primarily at pre-retirees, missing opportunities to engage with members throughout retirement.
Minimal communication was aimed at retired members, with the majority targeted towards members in the lead-up or early stages of retirement. It also neglected the specific needs of First Nations members, culturally diverse, or vulnerable ones.
This comes despite obligations under the Retirement Income Covenant (RIC) coming into force three years ago.
It also found “little evidence” of trustees tailoring their messaging and delivery methods to meet the diverse needs and preferences of their member base, including those already in the retirement phase.
Finally, the corporate regulator noted one-third of trustees lacked a formal process that considered member feedback.
ASIC commissioner Simone Constant said: “Over 1.5 million members are in the retirement phase now, collectively holding approximately $575 billion in superannuation assets, and more than 2.5 million Australians will enter retirement over the coming decade.
‘However, ASIC’s Moneysmart research suggests only one-third of Australians on the cusp of retirement are confident that they will be financially comfortable once they leave the workforce. It is important now more than ever for superannuation trustees to focus their attention on providing meaningful, and timely retirement communications to their members that can meet their needs.
“Moreover, members entering retirement typically hold larger balances, require more tailored solutions and expect high-touch support. Trustees that can meet these needs stand to unlock powerful commercial outcomes: stronger member retention, deeper engagement, and scalable growth.
“The clear message we are sending to super trustees is a one size fits all communications approach won’t work for all member groups as it may not provide the quality of information customers need to make confident and informed decisions about retirement.”
Calls to action for trustees include:
- Focus on informing members about retirement, rather than prioritising product promotion and member retention.
- Develop retirement communications that are better tailored to member needs, using meaningful member groups and nudges.
- Better tailor retirement communications to the diverse needs and preferences of member groups approaching and in retirement.
- Ensure retirement communications are accessible to culturally and linguistically diverse members and members with a disability.
- Adequately resource governance structures to execute the retirement income strategy and communications strategy, with appropriate oversight by executive and management-level staff.
- Strengthen oversight of external service providers that develop and deliver retirement communications to ensure the communications meet quality, compliance, and strategic expectations.
