Margaret Cole (left) and Jane Eccleston

A year on from the introduction of the Retirement Income Covenant, regulators ASIC and APRA have identified the need for super funds to partner with other funds if they can’t individually fulfill those obligations.

Speaking at the Retirement Conference, co-hosted by Conexus Financial and the Conexus Institute, APRA deputy chair Margaret Cole said as trustees evolve strategies for their funds, some may realise they do not have the capacity to develop “success in retirement” as a core competency to offer members.

“I encourage trustees to be clear and courageous in their overarching fund strategies and, where necessary, make strategic decisions to partner with other organisations to best serve their members,” Cole said.

“In some cases, this may even necessitate helping members to move to other funds that better meet their needs in retirement.”

The Retirement Conference is co-hosted by the parent company of Professional Planner and its philanthropically funded think tank, the Conexus Institute. It is held annually at Old Parliament House in Canberra with a focus on improving retirement outcomes for Australians.

Cole’s comments come a month after the regulators and Minister for Financial Services Stephen Jones told the Investment Magazine Group Insurance Dialogue that trustee response to the covenant has been underwhelming.

The lack of progress in the space also puts the minister in a compromising position as his Quality of Advice Review response is centered around super funds offering more financial advice despite funds already struggling with delivering an acceptable member experience.

“I’ve been around the grounds a lot in the last few weeks in different gatherings and in one-on-one meetings trying to unpack the blockers to progress,” Cole said, referring to the covenant.

“I’ve said before that I never admit to being surprised, but I will say I have been concerned by sentiments I’ve heard like, ‘why is this for us to do’, and maybe ‘we resent being told what products to offer’.”

Acknowledging that assisting members in retirement isn’t a new responsibility for the industry, Cole highlighted the need to be able to assist members at scale.

“The need for action is mission critical and urgent from a member point of view – we stand here today with six million members of the Australian community at or above superannuation preservation age,” Cole said.

“A further three million members will become eligible to draw from their super in the next 10 years – a 50 per cent increase over the next decade.”

Misunderstood advice

ASIC senior executive leader for superannuation and life insurance Jane Eccleston used her part of her speech to clarify three misunderstandings about the obligations under the RIC: personal financial advice as part of the covenant; more data being part of the solution; and the assumption that more data collected consequently results in financial advice.