The Australian Securities & Investments Commission has put superannuation trustees on notice that they need to improve their communications with members about retirement.
ASIC said many Australians lacked the information needed to make confident and informed decisions about retirement after a review identified a lack of urgency in improving retirement communications among trustees.
The review From superficial to super engaged: Better practices for trustee retirement communications found that some trustees offered one-size-fits-all retirement communications aimed primarily at pre-retirees, missing opportunities to engage with members throughout retirement and provide more meaningful support.
ASIC Commissioner Simone Constant said that despite the retirement income covenant obligations commencing over three years ago, some trustees were yet to address gaps identified by ASIC and the Australian Prudential Regulation Authority.
She said a uniform communications approach would not work as it may not provide the quality of information customers needed to make confident and informed decisions about retirement.
“It is important now more than ever for superannuation trustees to focus their attention on providing meaningful, and timely retirement communications to their members that can meet their needs,” Constant said in a media release.
More than 1.5 million members with $575 billion in superannuation assets were in the retirement phase, and more than 2.5 million Australians would enter retirement over the coming decade.
ASIC’s Moneysmart research suggested only one-third of those about to retire were confident that they would be financially comfortable once they leave the workforce.
Members entering retirement typically had larger balances, needed more tailored solutions and expected high-touch support.
“Trustees that can meet these needs stand to unlock powerful commercial outcomes: stronger member retention, deeper engagement, and scalable growth,” she said.
ASIC’s review also found little evidence of trustees tailoring their messaging and delivery methods to meet the diverse needs and preferences of their member base.
ASIC is calling on super trustees to:
- Tailor communications for members throughout retirement
- Provide accessible content for culturally diverse and vulnerable members
- Invest in governance and oversight of communication strategies, and
- Strengthen accountability of third-party service providers.
