APRA and ASIC warn super funds on retirement measures
The Australian Prudential Regulation Authority (APRA) has expressed concern at a lack of progress being made by superannuation funds in tracking the success of the Retirement Income Covenant strategies.
APRA deputy chair, Margaret Cole has said that without effective success metrics, super fund trustees could now not know if their strategies are working and members deserved better.
At the same time, the Australian Securities and Investments Commission (ASIC) commissioner, Simone Constant said trustees have a pivotal role to play improving retirement outcomes for their members.
The two regulators revealed that a recent pulse check had identified a lack of urgency by trustees in embracing the RIC.
It found that significant gaps remain.
As part of a follow-up survey of the broader superannuation industry, APRA and ASIC asked trustees to share their response to the recommendations and findings from the thematic review to assist members who are retired or approaching retirement as required under the covenant introduced in 2022.
Key observations from 48 survey responses, representing all trustees invited to participate, include:
- While approximately three quarters of trustees indicated that measuring retirement outcomes was a priority, only incremental progress had been made to measure and track retirement income strategies. Just eight trustees said tracking the effectiveness of retirement-focused assistance to members was a priority.
- Many trustees were taking steps to better understand the retirement needs of their members and had endeavoured to promote the availability and access to retirement-focused information for members. However, only one in five planned improvements identified by trustees were expected to be completed by mid-2024.
It said the responses from trustees pointed to several challenges in implementing the covenant, including uncertainty around the financial advice framework, privacy, security, and cost concerns on collecting more member data, and a lack of member engagement and financial capability.
“It said the responses from trustees pointed to several challenges in implementing the covenant, including uncertainty around the financial advice framework, privacy, security, and cost concerns on collecting more member data, and a lack of member engagement and financial capability.”
Hmm interesting. So where is the pushback on s99FA by some Trustees if there are concerns about these issues? Privacy, security, cost, collection of member data….
You can’t possibly say that it’s cool to require professional advisers to send Trustees redacted SOA’s at large cost with substantive privacy and security risk…..
….but at the same time as a Trustee say you have concerns about cost, privacy and security risk.
Something is wrong in Australia. Seriously wrong.
Another token slap on the wrist, after a nice lunch at CBus Stadium. All cozy and very predictable
Sort of reminds me of the action ASIC took against Dixon advisory, was awarded $7.5 million in the Federal Court, and sat back and watched as the PI only covered a proportion of the fine imposed on Dixon advisory. Never bothered to chase up the Dixons.
absolutely nobody at ASIC or APRA would be able to explain how it works nor can anyone else I suspect for that matter:. a ridiculous concept cobbled together on the spurious grounds that Treasury were concerned that older people were not living as well as they should.
Promoted as providing an income for life —but what income– .
This was/is the first strike to allow/ mandate industry funds to keep their money and provide a lifetime income of sorts with limited access to capital and where the capital is forfeited on death thereby addressing the Treasury paranoia about monies being left to children.
Don’t say you were not warned.
Totes agree the RIC is a wonderful Industry Super FUM grab dually promoted by Treasury to also flog buckets of Govt Green Bonds.
And let’s not forget if they find it hard to sell these cons then they set up the promotion of the Uneducated, Unqualifed, BackPacker Call Centers as the solution to Flog Vertically Owned, Single Products on mass.
What a cosy stitch up it is.
Canberra Pollies, ASIC, APRA & Industry Super = REGULATORY CAPTURE CORRUTION !!!!!!!!!!!!!!!!!!!
They are worried they will fail best interest duty because they want to sell them a lifetime annuity call it something else RIC what a load of BS. They are trying to stop money cannot be passed onto their kids, who will pay this off debt which will mean less money for the government from bank levys tax, sold by backpackers to a 72 and 82 year old’s to meet their sales target with complete disregard for the overall picture for the client.
Government will just change the means test later so these do not give the Centerlink benefits later on.