speech

A guide to ‘good’: delivering better retirement outcomes and member services for Australians

Speech by ASIC Commissioner Simone Constant at a joint ASIC/APRA session at the Conexus Institute Retirement Conference, 14 August 2024.

Published

Headshot of Simone Constant

Key points

  • ASIC is focusing on better retirement outcomes and member services. Member service failures has been a focus of our enforcement work this year.
  • We need funds to be transparent, accountable, and member-focused in how they consistently deliver for Australians both in retirement and also in all the years leading to it.
  • We expect funds to communicate proactively and transparently with members, be accountable and deal responsibly with their money and deliver value and services to consistently meet fair standards.

Check against delivery

Thank you Margaret[1] for opening the conversation and sharing the outcomes of our recent work together. One of the most rewarding parts of my role since commencing as a Commissioner has been working alongside APRA on this and other things. We are at our best when we are lined up this way.

On the ASIC side, one of our core objectives is to drive confident and informed participation in the economy for investors, consumers and superannuation members.

When we think about adding another three million Australians – to the six million already in retirement – by 2033, we realise we are facing an historic challenge in how to enable confident and informed participation in this population.

It’s why ASIC is focusing on better retirement outcomes and member services as one of our strategic priorities – and why member service failures has been a focus of our enforcement work this year.

But this challenge does not belong only to us, ASIC or even ASIC and APRA – it belongs to everyone in this room.

You are the stewards of $2.7 trillion in superannuation savings[2], which grows every day.

You are a driving force in the increasing privatisation of our markets – which, as we saw through ASIC’s recent market cleanliness work[3], may have implications for transparency and market integrity.

You have many obligations – but your most important obligation is to your customers.

Note the deliberate choice in language there – customer, not member.

Yes, the term ‘member’ comes with particular legal obligations, but they see themselves as your customers.

That’s how they’re used to dealing with their financial institutions.

That’s the level of service they expect.  

And ASIC expects you to be customer-centric in how you deal with them.

Delivering strong returns and balances is only part of your job.

Just as important is meeting your members’ – your customers’ – needs at every step from early accumulation right on through to retirement.

Yet two years on from the implementation of the Retirement Income Covenant, we are still having the same conversations. Equally, we’re still seeing a lack of urgency in improving member services despite calls from ASIC, APRA and AFCA. Remember what I said about being all lined up?

Quite frankly, our patience is running thin – we want to see meaningful action now.

We need funds to be transparent, accountable, and member-focused in how they consistently deliver for Australians both in retirement and also in all the years leading to it.

We hear that you want more clarity from us as regulators on how to meet this challenge.

I am here today to share with you some examples of what good looks like and of better practices emerging right now: some quick wins that you can act on, that can have a measurable and meaningful impact for your members.

Transparent and informed

First, let’s talk about what being ‘informed’ means.

Customers increasingly expect the businesses they deal with to anticipate and accommodate their needs.

The right data – and the right insights – can help you do this.

We understand that industry is concerned about the cost and privacy issues associated with collecting more data.

That is not what we are asking funds to do.

Instead, we are asking you to maximise the value of the data you already have.

It’s their data – the members – and our ask is for you to use it to meet their needs.

For example, you could show whether your members are on track to have the kind of retirement they expect, based on their projected balance and their current income levels. Trustees can and already are doing this.

On transparency, let’s talk about member services.

We are losing patience when we see, for example, that between the 2022 and 2023 calendar years, complaints to AFCA about delays in claims handling by super funds more than doubled[4]. We are particularly concerned about delays in processing death benefits claims, where complaints tripled over the same period[5].

As you will know, as part of our review of superannuation fund member services, we are looking at death benefit claims handling.

The first phase of our recent surveillance found that trustees can be doing more to help members understand, put in place, and update death benefit nominations. And we know from the complaints data that this makes for far better customer outcomes at a time of real need. Ask whether you are proactively and regularly engaging with your members on this.

And of course in terms of data and being informed funds should also be looking very closely at, and acting on, the complaints they receive.

Accountable

Next, I want to share some of the better practices we’ve seen related to accountability.

It’s about being accountable to your member, from the trustee board down.

For this to occur, you need the right people, at the right levels, who are empowered to make good member and good retirement outcomes a priority.

According to our recent pulse check[6], some funds have set up retirement-focused leadership roles and teams.

This is a good start, but it needs to extend beyond the executive level.

Boards of trustees need the right skills and reporting structures to oversee and deliver retirement income strategies as well as the delivery of consistent and fair member services more broadly.

ASIC is not going to tell you who to have on your board, but whoever you have must deliver to the standards that members expect, in a way that is measurable and meaningful.

Unfortunately, too few trustees are currently tracking their success against their retirement income strategies.

Only eight – of 48 funds in the survey – said tracking the effectiveness of the services they provide to members is a priority[7].

The same applies to member services, where we’re also asking funds to get on with it and put accountability front and centre by focusing on:

  • consumer-centric performance objectives and measurement; and
  • regular and meaningful performance reporting to the board about delivery of member services, using specific, measurable, qualitative, and quantitative metrics.

You can’t manage what you can’t measure.

Member-focus and consistency

Member expectations are going to look very different depending on where members are at on their retirement journey.

In the pulse check, it was good to see some funds starting to map their members’ journeys – to better understand their entry points, touchpoints and pain points along the way.

Superannuation is one of the most important, if not the most important, investment held by most Australians. Around 16 million Australians have a super account according to the Treasurer (at the end of last year) – and there are 22 million member accounts with APRA-regulated funds[8]. We need to ensure it continues to work for them – at every stage.

At ASIC we want to see more members constructively engage with their super wealth and super fund.

We are seeing strong demand for trusted, independent financial information, with more than 11 million users visiting the Moneysmart website in the past year – including more than half a million users of Moneysmart’s superannuation calculator.

It’s clear Australians want better information to help guide them through the financial milestones of life.

Unfortunately though, our recent work on superannuation member services in relation to death benefit claims demonstrated the websites – the information front doors – of many funds are clearly lacking.

They’re inaccessible, they’re missing important information, and they don’t make life easier for members and their families in those life-changing moments.

Try navigating your website from your members’ perspectives.

Is it easy for members to make those big decisions, with comparisons or case studies?

Is it accessible for the one in six Australians who have a disability[9]? Or the one in four Australians who speak a language other than English at home[10]?

Finally, is it customer-centric when members need it the most at those life pain points?

Ultimately, ASIC expects funds to communicate proactively and transparently with members, be accountable and deal responsibly with their money and deliver value and services to consistently meet fair standards.

Transparency, accountability, consistency: where funds fall short of these expectations, ASIC will and must bring the full force and effect of the law.

Conclusion

The good examples I’ve spoken about today are occurring right now across the industry.

We recognise and welcome the significant investment and effort it has taken to make this happen.

We do not want these examples to be outliers.

We need all funds to rise to the high watermark and deliver the best possible retirement outcomes for their members along with consistent, customer-centric member services.

We need funds to show us and not just tell us and, even more importantly, to show your members that you’re doing better, for them.


[1] Margaret Cole, Deputy Chair, Australian Prudential Regulation Authority.

[2] Quarterly Superannuation Statistics, total APRA-regulated assets, APRA, March 2024.

[3] 24-162MR Australians can be confident in the integrity of our equity markets: ASIC report | ASIC

[4] Australian Financial Complaints Authority (2024).

[5] Australian Financial Complaints Authority (2024).

[6] REP 784 Industry update: Pulse check on retirement income covenant implementation | ASIC

[7] REP 784 Industry update: Pulse check on retirement income covenant implementation | ASIC

[8] Quarterly Superannuation Industry Publication, APRA, March 2024.

[9] People with disability in Australia, Prevalence of disability - Australian Institute of Health and Welfare (aihw.gov.au)

[10] Culturally and linguistically diverse Australians Overview - Australian Institute of Health and Welfare (aihw.gov.au)