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APRA – Margaret Cole and ASIC – Jane Eccleston - Speech to the Conexus Retirement Conference

Deputy Chair, APRA – Margaret Cole and Senior Executive Leader, Superannuation and Life Insurance, ASIC – Jane Eccleston



Both APRA and ASIC welcome this opportunity to discuss how the system can deliver better outcomes in retirement for members of the Australian community. We will bring a regulatory perspective to this discussion, but we are also here to listen to industry views and understand how you, as superannuation trustees, plan to evolve and innovate in your thinking about designing, improving and implementing retirement income strategies. 

I will speak for a few moments about what we have observed in reviewing the implementation of the retirement income covenant over its first year, including acknowledging some progress made across the industry and by many in this room. I will also outline regulatory expectations of all participants in the industry as implementation of the retirement income covenant matures – specifically, the uplift we are expecting to see from here.  

Jane will then speak to the context in which we undertook our analysis and bust a few myths that may have emerged in the fortnight since we published our joint report on this topic. And Mike and Leah will add their thoughts in the panel discussion.  

I’ve been around the grounds a lot in the last few weeks in different gatherings and in 1:1 meetings trying to unpack the blockers to progress. 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’. 

Australia can be proud of its achievement in creating a superannuation system that stewards AUD$3.5 trillion in assets but the point of the system is to provide income in retirement. 

This is an industry that has taken significant steps to strengthen governance, improve industry practices and address performance issues over the past 10 years. APRA’s introduction of prudential standards for superannuation in 2013 has no doubt had something to do with that. Is there more to be done? Absolutely! But trustees do recognise their obligations to promote strong member outcomes and acknowledge the need for further improvement, and most are willing and committed to deliver on this. 

The challenge for us all is to ensure that this focus translates into actual, measurable improvements through the eyes of members. 

So, despite the progress that has been made – focused on the accumulation phase of superannuation – there is an urgent need to improve the experience of members of the Australian community approaching and in retirement in terms of the quality of assistance offered, including the financial outcomes delivered, for superannuation members.  

In saying this, I acknowledge that assisting members in and approaching retirement is not a new responsibility for the superannuation industry. But 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. A further three million members will become eligible to draw from their super in the next 10 years1 – a 50% increase over the next decade. 

All customers of the superannuation system are entitled to rely upon their superannuation fund for assistance as they plan for a sound financial future. But I think we would all acknowledge – and the Retirement Income Review found – that the Australian community is not yet sufficiently well-supported in this regard. There is significant room for positive impact by trustees. Hence the importance of the introduction of the retirement income covenant in the SIS Act and hence the urgency in our key messages today. 

Thematic Review 

The purpose of APRA and ASIC’s joint retirement income thematic review was to gauge the progress industry has made in implementing the new covenant. We wanted to see where progress had been made, where innovative thinking was getting traction and importantly what good practice looks like … and conversely where the key gaps remain. 

It was reassuring to see that a significant proportion of the trustees in scope for the review had extended their focus to include the retirement phase of superannuation and, in general, trustees are developing and continuously improving their retirement income strategies.  

But we were disappointed by the variability in quality and depth of research, data and, therefore, member-centricity underpinning the design of some retirement income strategies and the degree of urgency – or lack of it – in strategy execution by a number of trustees.  

Standing here more than a year on from the introduction of the new covenant, APRA and ASIC cannot be confident that trustees – as a whole – have made adequate progress in satisfying three elements that we consider core to effective implementation of the covenant by the industry: 

  • understanding members’ needs in retirement; 
  • designing fit-for-purpose retirement assistance; and
  • overseeing retirement income strategy implementation. 

Government, regulators, and industry bodies all have roles to play in enabling and supporting the superannuation industry to succeed in delivering strong outcomes in retirement for all members of the Australian community. But ultimately, it is trustees who must take the opportunity to design and implement member-centric retirement income strategies. After all, its trustees who know their members best.  

So, speaking from an APRA perspective, what are the next steps? 


Firstly, APRA is following up directly with those trustees who participated in the review and who were found to have specific areas and practices in need of improvement. We will be keen to understand what these trustees are doing to address identified issues. 

Over the final quarter of this year, APRA will also seek all trustees’ self-assessments against the key findings in our joint report, including how they have assessed themselves against better practice examples.  

All trustees can expect APRA to monitor closely the progress and implementation of retirement income strategies as part of APRA’s regular supervision agenda this financial year and expect APRA and ASIC to remain linked-up in terms of responses. 

Regulatory Framework 

The review findings provide insight into the regulators’ perspectives on what sound progress looks like at this point of implementation of the covenant. 

Not all of the review findings will be embedded into APRA’s prudential framework immediately. However, fundamental aspects will be incorporated into APRA’s Prudential Standard SPS 515 Strategic Planning and Member Outcomes in a set of planned updates over the next 12 months, to ensure that APRA’s prudential framework adequately supports the new covenant. 

The review findings – in particular the insights into better practices observed – detail some useful benchmarks against which all trustees should review their practices. Both APRA and ASIC encourage all trustees to observe and learn from leading practices of peers, which will continue to evolve. This is especially relevant to those trustees whose progress to date may be insufficient.  

Bold Strategies 

As a final thought on this topic for today, let me be bold. 

Leading a superannuation fund that focuses on providing strong outcomes to members in both the accumulation phase and in retirement requires a fundamental step-change in mindset and capability. As trustees evolve the strategies for their funds, some may recognise that they do not currently have the requisite capability to do both successfully, nor do they plan to develop ‘success in retirement’ as a core competency.  

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

For many in this room, I acknowledge that your businesses have made the strategic decision to invest in retirement capabilities, including in certain cases as a point of competitive differentiation for members. In many cases, your businesses have shown leadership in addressing the challenge of satisfying the three elements that I outlined as core to effective implementation of the covenant, for the benefit of your members. However, no individual trustee has fully cracked this yet and there is much that can be learned from peers. 

This means there is a significant portion of the Australian population heading towards retirement – the silver tsunami to use ASIC Commissioner Danielle Press’ words – who are underserved currently by the industry. 

In producing our report and in speaking here today, APRA and ASIC seek to encourage fresh thinking about the types of offerings the industry might provide to members in retirement. Based upon our observations, this could include trustees developing offers with specific drawdown patterns, providing budgeting tools or expenditure calculators, improving factual information for members about key retirement topics and, as many industry participants have indicated, the provision of longevity solutions. 

Before I hand over to Jane, I’d like to emphasise another point made by Danielle Press who said in a recent media interview that APRA and ASIC are “joined at the hip” when it comes to driving better financial outcomes for retirees.  

We continue to look at ways that we can work together, and with you, to help members achieve financial security in their retirement years. 



We are here to listen and participate in the feedback cycle. We issued the report following our review to share insights across the industry, call out areas for industry to focus on going forward and encourage innovation. So, I thought I would use my time to today to clear up some potential misunderstandings, based on some of the reactions we have heard so far.  

Misunderstanding no. 1: without being able to provide personal financial advice to members there is little progress that can be made on retirement outcomes for members. 

Often discussions around the Retirement Income Covenant very quickly become a discussion about the challenges of personal financial advice regulation. Fundamentally superannuation funds are product providers and, like other financial service product providers, cannot realistically have a business model whose success is entirely contingent on making individual product recommendations to customers. 

More pragmatically, the question for super funds to ask is what can be done to make sure that: 

  • the products available are high quality and meet members' needs; 
  • members' decision-making about these products is supported appropriately so that the chances of members' ending up in a product suitable for them are maximised and ending up in a product not suitable for them is minimised. 

And of course, as these are generally long-term products. This is not a set and forget situation – essentially, every day a member stays in a product they are implicitly making a decision to stay in the product.  

Misunderstanding no. 2: More data is itself the solution 

One of the things we are hearing is that there is a bit of confusion about ASIC and APRA’s expectation when it comes to collecting data from members to help inform trustee’s retirement income strategies.  

Let me be very clear - what we don’t want is trustees collecting endless amounts of member data. 

What we want is trustees considering what data they need to assist them to develop, implement and review their retirement income strategies. This is a decision that each trustee will need to make for themselves - and the type and extent of data required will vary from fund to fund.

Trustees should have already undertaken a stocktake of the member data they currently have and a gap analysis of the types of data they need. In other words, what data would lead to a trustee changing or refining its strategy? We expect trustees to have plans for how they are going to obtain any necessary missing data.  

Misunderstanding no.3: Collecting data on members results in the provision of personal financial advice 

A related concern we have heard about seems to be centred around the interaction between the collection of member data and the decisions trustees make with respect to their fund’s choice architecture.  

I think it is important to clarify that when we refer to the fund’s choice architecture, we are talking about more than just the retirement product or solutions offered by a fund. I am also talking about the services that the fund provides and the interactions it has with its members through things such as advertising, member communications or other processes which involve members.  

So, when we say that analysing member data can help trustees further enhance their choice architecture, in no way are we suggesting that trustees must use the data they have collected about their members to deliver them personal solutions that are designed specifically for that member. Nor do we think that the collection of member data somehow automatically translates into a requirement or obligation to provide personal financial advice or means that any future interactions the member has with the fund will involve the provision of personal financial advice.  

Retirement income strategies need to be consumer-focused and evidence-based. And it is this member data that helps provide that evidence base.  

So, when considering how member data can enhance a fund’s choice architecture, we encourage you to think about how member’s choices are made – how to present information and offer choices in a way that, as I indicated earlier, maximises the chances of members ending up in products right for them and minimises the risk of members ending up in products that are not. For instance, if you have a cohort of members with low balance, is sending them advertising which only highlights a longevity product around the time of their retirement a sensible approach? I am sure all super funds are doing this to some extent about all kinds of products they currently offer.   

Looking to the future 

Margaret has already commented on some of the future work APRA will be doing in relation to the retirement income covenant. As well, ASIC will be keeping a close eye on how trustees are implementing their retirement income strategy having regard to its consumer protection mandate. Think DDO, disclosure, advice and anti-hawking obligations. More generally, ASIC will continue to have a focus on the delivery of member services. We want trustees to effectively assist their members in a manner that complies with the very laws intended to protect members. 

Conclusion – Laying Down the Challenge 

Finally, I wanted to make some comments about the headline finding from our review (as featured in most of the industry media) - the lack of progress and urgency demonstrated by some trustees in implementing their retirement income strategies.  
The way in which a retirement income strategy is implemented today will differ from its implementation in 5 or 10 years’ time. We appreciate that there are uncertainties on the horizon for super funds, and there always will be. The question for trustees is 'what should they be doing today', and many in the industry are working through this challenge.  

Margaret mentioned at the start today that we intend to listen to the views and challenges of those in the room today. David Bell of the Conexus Institute has the unenviable task of drawing together those views into a set of messages to the Minister at the end of the day – a progress report, if you like. Given the importance of the task at hand to all members of the Australian community, I fully expect the dialogue today to be positive, focused on the possibilities and industry-led solutions.  

Through our joint report, ASIC and APRA have set out our joint views on the most pressing challenges to be solved by the industry. Over the course of this afternoon, let’s hear about the solutions... 


1National, state and territory population, December 2022 | Australian Bureau of Statistics (Population by age and sex – national, Table 8).


Margaret Cole, ASIC

The Australian Prudential Regulation Authority (APRA) is the prudential regulator of the financial services industry. It oversees banks, mutuals, general insurance and reinsurance companies, life insurance, private health insurers, friendly societies, and most members of the superannuation industry. APRA currently supervises institutions holding around $9 trillion in assets for Australian depositors, policyholders and superannuation fund members.