The situation amplifies concerns already raised by regulators. A joint statement from ASIC and APRA last year condemned the tepid responses from funds concerning their RIC duties. Initial findings had already identified a major shortfall in the integration of retirement income strategies into business operations, as delineated in Prudential Standard 515. Industry experts, including former ASIC Commissioner Danielle Press, have emphasised the need for consumer-centric, evidence-based retirement plans.
APRA's deputy chair, Margaret Cole, reinforced this stance, noting that while some funds have initiated improvements, overall advancement has been insufficient. As the third anniversary of RIC approaches, Cole stressed the necessity for funds to prioritise retirees as they had prioritised accumulation schemes. Ongoing surveys and data collection initiatives aim to ascertain the effectiveness of super funds in addressing retirement income challenges.
James Koval from ASFA acknowledged the complexity of developing suitable retirement solutions, detailing the considerable number of products that funds have developed. Despite this, funds remain focused predominantly on the accumulation phase, often to the detriment of retirement outcomes. Overseas interest in Australia's retirement arrangements suggests potential global leadership, though many within the sector remain aware of persistent gaps and challenges.
The flexibility embedded within the RIC mandates allows funds to cater specifically to individual member needs, taking into account a web of personal factors. Yet, advancements are still needed in areas like data availability, regulatory frameworks, and member guidance. Former regulator Danielle Press highlighted that under current legislation, more proactive strategies and better communication could enhance member outcomes.
Ultimately, calls for mandatory service standards in superannuation are growing stronger, flagged by the Super Members Council. This aligns with prior warnings from government figures about potential enforced regulation should voluntary improvements fall short. While the need for a more customer-focused and accountable industry is clear, super funds face continued pressure to self-regulate and enhance their service offerings.
