Superannuation in Australia has been a remarkable success story. Around 18 million Australians have a super account, and super assets total $4.5 trillion. We are at the stage now where people who are looking to retire in the next ten years have had some form of compulsory superannuation for most of their working lives.
In the inaugural edition of Retirement Magazine, produced by Professional Planner publisher Conexus Financial, Treasurer Jim Chalmers stressed that our ageing population makes retirement incomes more important than ever. He outlined the genesis of our reform agenda and wrote that 2.5 million Australians are estimated to move from the accumulation to the retirement phase of superannuation in the next 10 years.
It’s well past time to move the public conversation from superannuation as a “nest egg” to superannuation as “income for your retirement”. This has to be coupled with products that make people confident to make that change in their thinking.
Central to getting the shift from accumulation to retirement incomes right will be confidence of members, and central to that is how they are treated by the funds they are members of. Their super is often the largest investment they are making, apart from housing.
Funds generally meet or exceed what the community expects of them. But we’ve seen too many cases where they don’t. Complaints are growing about poor service and communication, or the lack of compassion and timeliness in handling of death benefits and insurance claims.
New mandatory and enforceable standards will require superannuation funds to focus on better handling of death benefits. Insurance claim processing should be fair and efficient. And funds will need to provide clear, respectful and accessible member communication.
Regulators are also keeping a close eye on how trustees are performing against their obligations under the Retirement Income Covenant.
These standards build on existing requirements and reflect similar obligations in banking and insurance. Treasury has consulted with industry, consumer groups and regulators. At the time of writing, we’re preparing the draft legislation for feedback.
Regulators are also keeping a close eye on how trustees are performing against their obligations under the Retirement Income Covenant. ASIC and the Australian Prudential Regulation Authority released their latest implementation pulse check in November 2025. They found a growing divide between trustees since the RIC took effect about three years ago.
Some are innovating to improve retirement outcomes, while others remain more narrowly focused on compliance. The pace of innovation needs to be quickened because it is likely many people have not heard of the options which will be available, let alone have time to learn about what they offer.
Government role
Government has a role to play in this. We have recently released the Retirement Reporting Framework and the Best Practice Principles for superannuation retirement income solutions.
Together, these measures strengthen the foundations of our retirement income system and support funds to deliver better outcomes for every Australian entering retirement. These reforms aim to create an environment that enables trustees to innovate and deliver better retirement solutions for their members, building on the obligations introduced by the covenant.
The Best Practice Principles give trustees voluntary guidance on the design and delivery of retirement income solutions. The principles outline the steps funds can take to better understand members, design fit-for-purpose solutions, and engage their members on retirement income decisions.
The Retirement Reporting Framework will collect data on industry progress in the retirement phase of superannuation. It will enhance member outcomes by creating greater transparency across the industry.
These measures will be reviewed regularly to ensure they remain fit for purpose and reflect evolving industry practice. To help people get the information they need, ASIC has updated its retirement content on the moneysmart.gov.au website and it has launched a new retirement hub.
We also need to ensure that Australians have access to affordable and appropriate financial advice so they have trustworthy resources to help them navigate both the accumulation and retirement phases.
The government is committed to delivering sensible, fit-for-purpose financial advice reforms that help the Australians who want advice to access it. Our reforms to adviser education standards are also geared towards helping more advisers enter the industry, without compromising on standards.
Our reforms to adviser education standards are also geared towards helping more advisers enter the industry, without compromising on standards.
We have also seen the significant harms that can arise from financial adviser misconduct, and the pressure that this misconduct places on the Compensation Scheme of Last Resort. We are ensuring that our advice reforms are properly calibrated with our reforms to improve consumer protection across the superannuation sector, because scale and access to advice do not need to come at the expense of consumer protection.
The risk of those harms has risen as the size of the superannuation pool has grown, with growth too in the desire of bad actors to get their hands on that money. Recent collapses – most notably Shield and First Guardian – have shown the devastating impact financial misconduct and poor governance can have on consumers. The reality is people can lose substantial portions of their life savings.
Need for reform
These collapses highlight the need for reform. Large-scale loss events erode confidence and make Australians understandably nervous about investing, and reduce participation in legitimate, well-regulated products.
The Albanese government is considering targeted measures to deal with the issues across the ecosystem, including reform of the oversight and governance of managed investment schemes, and reforms to the system to tackle inappropriate lead generation, create a safer framework for superannuation switching, and strengthen trustee governance standards.
We are also working on ensuring the sustainability of the CSLR, so that it can continue providing a lifeline for Australians who have exhausted all other avenues for compensation. The CSLR must continue to provide an opportunity for consumers to recoup some of their funds, and it must continue to be sustainable for the industry that is funding it.
The government is not yet done with improving the accumulation phase and we’re proud to deliver significant reforms to the superannuation system. Payday Super reforms start on 1 July this year. This is a once-in-a-generation change that will help close gaps in retirement savings and help protect workers against unpaid super entitlements.
We’re boosting the Low Income Superannuation Tax Offset (LISTO) by $310 to $810 and will raise the eligibility threshold from $37,000 to $45,000 from 1 July 2027. This will make sure low‑income workers receive a fairer tax concession on their super contributions and will help deliver a more secure retirement for 1.3 million Australians – the majority of them women.
We’re also acting to better target superannuation concessions, with legislation introduced into the Parliament in February. These are important reforms that, alongside the boost to LISTO, will help ensure the system overall is fairer and more sustainable.
Our approach aims to balance things out and put the retirement phase on equal footing. We want to create an environment for funds to innovate and deliver better retirement solutions for their members. At the same time, we want to help members understand what they should be seeking from funds in their retirement.
Taken together, our retirement phase reforms aim to improve the quality of retirement outcomes delivered to members. After a lifetime of saving through superannuation, members deserve nothing less than a dignified retirement, consistent with the objective of superannuation.
This article appears in Vol 3 of Retirement Magazine in print, published this month.
Dr Daniel Mulino is Assistant Treasurer and Minister for Financial Services, and has been the Member for Fraser since 2019.
