As regulators sharpen their sights on super funds’ preparedness to meet the Retirement Income Covenant (RIC), new research suggests funds are reflecting a “deep understanding” of their members’ needs as they enter their golden years.
Investment Trends’ latest Super Member Engagement (SME) Report and Retirement Income Report have found strong satisfaction ratings from members across a number of service elements.
Access to pension accounts saw the highest satisfaction ratings, with transferring to the account receiving 76 per cent and withdrawing from the account receiving 73 per cent.
Ease of access to information also ranked highly with a 71 per cent satisfaction rating.
According to Investment Trends, these ratings “underscore the success achieved in supporting retirees as they transition into retirement” and echo previous observations from APRA that availability and access to retirement-focused information are “crucial” for members.
“Our data clearly shows that super funds are stepping up their game in service delivery,” said Eric Blewitt, CEO of Investment Trends.
“Members are recognising and appreciate the ease and efficiency of transactions and information access, which are critical components of their overall experience.”
The research found over half (60 per cent) of retirees either ‘agree’ or ‘strongly agree’ that their super fund offers retirement income products suitable to support their retirement lifestyle, which demonstrates how funds are aligning their product offerings to members’ needs, Blewitt said.
“This is a significant achievement, reflecting a deep understanding of member needs and effective product design, which resonates with APRA’s emphasis on addressing retirees’ needs,” Blewitt said.
Notably, using advanced statistical modelling, Investment Trends said that funds’ ability to provide helpful advice on post-retirement issues remained most crucial (100 per cent) for members ascertaining its retirement suitability.
This was followed by the fund’s performance over the last three to five years (76 per cent) and its post-retirement support and guidance services (70 per cent) as key service elements under consideration.
The research also indicated increased engagement leads to a greater likelihood of members starting to consider their retirement plans.
“Continuous engagement is key,” Blewitt said.
“Our findings suggest that the more members interact with their super fund, the more they start thinking about and preparing for retirement. This highlights the importance of maintaining regular, meaningful communication with members, a point also highlighted by APRA as critical for effective retirement planning.”
However, the research noted “gaps and opportunities” for super funds to accelerate the implementation of retirement income strategies, with Blewitt conceding there is “still work to be done” in terms of strategy implementation and tracking success.
Earlier this month, ASIC and APRA had called for superannuation trustees to boost efforts to track and measure the impact of their strategies to improve retirement outcomes for members.
In a joint statement, the corporate regulator and the prudential supervisor revealed a pulse check found “some significant gaps” still remain, a year after the regulators first identified a lack of urgency among trustees in embracing the intent of the RIC.
In a survey with almost 50 responses, just eight trustees said tracking the effectiveness of retirement-focused assistance to members was a priority.
Similarly, only one in five planned improvements identified by trustees to better understand members’ needs were expected to be completed by mid-2024.
