While ASIC still believes there is a “lack of urgency” with implementing the Retirement Income Covenant (RIC), super funds want to ensure their products are well-developed first to meet member outcomes.
In July 2023, ASIC and APRA conducted a thematic review of 15 trustees responsible for 16 funds and their progress in implementing the RIC over the past year, which first came into effect in July 2022.
“Overall, the review found that while trustees are improving their offerings of assistance to members in retirement, there is variability in the quality of approach taken and a lack of urgency in embracing the intent of the covenant,” it said.
A month later, APRA described it was still worried that it “cannot be confident” that super fund trustees are adequately implementing the Covenant.
There is no singular fund or trustee that has “fully cracked” the RIC yet, APRA deputy chair Margaret Cole said in August.
Speaking at the 2023 ASIC Annual Forum in Melbourne on 22 November, Jane Eccleston, senior executive leader of superannuation and life insurance at ASIC, shared the regulator’s updated view on the matter.
“We saw that a lot of trustees had taken great steps in terms of implementing retirement solutions for their members. But we also found that there was a variability in the quality of approach taken and a lack of urgency in embracing the intent of the covenant from some funds,” she said.
However, Aware Super head of retirement, Jacki Ellis, provided a different perspective on the rush for implementation.
“We need to make sure that the retirement solutions and products that we develop actually are what members want and we can get members into them. If we don’t see that take-up, then all of that work, we’re not actually moving the dial on member outcomes,” she explained.
Moreover, super funds need to “deeply understand” their members, Ellis added, with retirement being a uniquely personal experience.
Tim Jenkins, superannuation consulting leader at Mercer Consulting, further reiterated Australia’s strengths when it comes to accumulating wealth, but downfalls after “what happens next”.
He was nevertheless optimistic about future outcomes: “In the last 10 years, the superannuation funds have put in the infrastructure, which allows what’s been happening in the last 12–18 months and what will happen in the next 18 months.”
