Call to delay Retirement Framework until DBFO settled

Industry funds have lamented the absence of investment performance metrics in Treasury’s proposed Retirement Reporting Framework.

As well, the industry funds are urging that finalisation of the framework be delayed until after the Government’s Delivering Better Financial Outcomes (DBFO) legislation is passed, because the reforms are expected to “substantially expand and clarify the ability of funds to provide information, guidance and advice to members approaching retirement”.

In a submission responding to consultation around the Framework, the Super Members Council (SMC) said the absence of investment performance metrics in the retirement phase represented “a significant gap”.

“Given the expected duration of retirement—often exceeding 18 years—investment returns are vital to sustaining income and financial security. Including these metrics will enable a complete picture of retirement income product effectiveness,” it said.

The SMC has also recommended the imposition of a “quality filter” for retirement products suggesting that the filter be aligned to the objectives of the Retirement Income Covenant – maximising income, managing longevity and investment risks and enabling flexible access to funds.

“The proposed metrics in the Framework are focused on measuring super fund processes, offerings, and member engagement behaviours rather than directly assessing member needs or outcomes,” the SMC said.

“Most indicators measure whether trustees provide products, guidance, advice services, and tools and how many members use them, which reflects processes, and availability.

“These metrics show how trustees implement strategies, design retirement options, and engage members—the “what” and “how” of fund activity. Although this is an important part of the retirement puzzle, it doesn’t ensure members are making the best choices they can for their retirement, which should be the primary focus,” the SMC submission said.

“The Framework is silent on specific measures for members with lower balances or less engagement. These members often face greater risks of poor retirement outcomes and financial vulnerability, yet their experience may be overlooked or masked in aggregated data.

“Members with lower balances or limited engagement tend to have different retirement income needs and challenges compared to more engaged or higher-balance members. They are more likely to face financial insecurity, require appropriate retirement products, and benefit significantly from enhanced support and engagement strategies.”

“ Members with lower balances may require different product offerings, advice approaches, and engagement methods to optimise their retirement outcomes. The Framework could better support the RIC by incorporating more outcome-focused, member-centric, and equity-sensitive measures that align tightly with the RIC’s objectives. Usage data is more meaningful when paired with outcome-focused metrics, such as median drawdown rates, proportion of income meeting actual expenditure, balance utilisation to death, and member satisfaction or well-being.”