Have super, am retired, now what?

Article published 19 July 2023

Subscribe to CPSA news

Have super, am retired, now what?

It's taken super funds and APRA seven long years to not deliver help for retired people and show them how to get the most out of their savings.

IF you are retired and have money in super, chances are your super fund is not really helping you making the best use of your savings.

APRA, the Australian Prudential and Regulatory Authority, is continuing to give stick to the financial services industry in Australia. It has chided banks on their lax approach to cybersecurity. Now it’s turned the spotlight onto superannuation funds and the way funds deal with its retired members and members about to retire.

CPSA’s view has always been that Australian super funds don’t help their members in retirement because that means helping them to withdraw their savings over time. Super funds are happy for that money to stay. The more retired members leave in their super, the more funds-under-management the super fund has.

What it also means is that once people retire, there’s no one to help them with a good financial plan to allow them to have the best life they can with the savings they have accumulated in super.

APRA reads funds the Riot Act

Now an APRA review has found that super funds are still dragging the chain. Still?

Yes, because in 2021, after five years of consultation about superannuation funds starting to provide genuine retirement income products to their members, APRA and the super funds agreed on a Retirement Income Covenant.

This Covenant compelled super funds to develop a Retirement Income Strategy. This Strategy was supposed to guide retiring superannuation fund members on how to go about formulating and executing their retirement income plan.

It was essentially a strategy to teach people to become their own financial planners. You could call it ambitious. You could also call it something which was set up to fail.

Now, two years after creating the Covenant and seven years after APRA and the funds started talking, APRA’s review criticises the super funds for the following failings.

Skip the following italicised quotes from APRA’s report if you like, and move to the one sentence summary that follows them:

“While trustees draw data from a range of internal and external sources to understand their members’ retirement needs, all have gaps in the critical information they need about their members to inform the development of an effective retirement income strategy. Very few had plans to address these gaps.”

 “Trustees have taken positive steps to improve assistance through a range of measures. However, some trustees are not using metrics to track how their members are using the assistance measures and their effectiveness to determine whether any changes are needed.”

 “Overseeing strategy implementation. Many trustees have not embedded their retirement income initiatives as concrete actions in their overall business plan. Additionally, a majority of trustees lack quantitative metrics to assess the retirement outcomes resulting from their initiatives.”

CPSA’s summary: Super funds weren’t checking how retired members were doing, weren’t checking if member assistance measures were being used and were working and weren’t checking the implementation of their Retirement Income Strategy.

An even shorter summary: Super funds drew up their Retirement Income Strategies and then put them in the bottom drawer.

The irony of the APRA review and its findings is that what’s become of the Retirement Income Covenant and the Retirement Income Strategies written by the super funds represents a monumental regulatory failure. That is, APRA failed.

APRA failed Australians retired and about to be retired.

There isn’t a word about that failure in APRA’s report.


For more information please email our media contact at media@cpsa.org.au

Stay up to date with CPSA news and media releases

Our regular email newsletter provides valuable insights and information on topics such as pension entitlements, healthcare, government policies, and more.

  • This field is for validation purposes and should be left unchanged.