The superannuation industry is gearing up to help members shift to retirement with mass education campaigns and new products ahead of the results of a joint APRA and ASIC review of funds’ retirement strategies.

APRA and ASIC will release the results of its first review of the industry’s strategies in mid-2023 which will serve as a guide on just how interventionist it plans to be. The industry is hoping for some feedback and guidance from the regulator even to the extent that Fund “X” provided a good strategy and Fund “Z” was not so good.

WTW’s Nick Callil said the Retirement Income Covenant last year was “a high-level document, now the funds have to actually develop a strategy”.

Equipsuper’s head of retirement Sam Higgie tells Investment Magazine the retirement focus takes the industry back to its fundamentals as “helping people in retirement is the whole purpose of superannuation” but member reaction to the retirement covenant has so far been muted though he expects that to change. He says the process of releasing retirement strategies last year was useful but for competitive reasons some funds did not release their full strategies.

Higgie says Equip first attempted to put people into cohorts but then realised people were looking for more individual advice. This was also the thinking at AMP said Ben Hillier, general manager – retirement solutions. He said the cohort strategy was flawed as two people might have $500,000 in the account but one also owned a million BHP shares and five properties so clearly their needs were different.

Higgie is one of several new appointments in the industry to the role as head of retirement. With over 900,000 members over the age of 50 years, AustralianSuper appointed Shawn Blackmore as its first chief officer retirement late last year. The fund has 150,000 members who are in retirement accounts. Other notable appointments include Jacki Ellis’ internal promotion to head of retirement at Aware Super, along with Young Tan’s move from UniSuper to Aware Super and Jon Sedawie’s move from Cbus to AustralianSuper.

Advice vs education

Education is a big part of the transition to retirement and funds have been deploying a variety of communication tools to improve member knowledge.

Equip found members were looking more for guidance than full blown advice. Surveys revealed around one third of members did not want any advice, one third looked for guidance and one third wanted everything done for them. “The process from here was all about engagement, education and assistance, with product development not at the front of the to do list,” said Equip’s Higgie.

Timely information could help members save thousands of dollars according to Andrew Boal, partner at Deloitte. He says some funds had members who were past retirement age with money sitting in their accumulation account seemingly unaware of the tax advantages of swapping into a retirement account.

Australian Retirement Trust − the merged QSuper and Sun Super − strategy chief Teifi Whatley says the fund uses annual statements to help guide members on their progress and how much their account would provide in income payments when they retire.

“We use seminars, webinars and the website as much as possible to guide members,” she says.

Hostplus plans to deliver “Wake Up“ packages to members to try to get them to engage more closely with the fund to improve their lifestyle in retirement.

“Australians have the reputation for being the wealthiest people in the graveyard and we want to help members make the most of their retirement,” head of member experience Paul Watson says.