Initial review of RIC strategies underwayBY JAMIE WILLIAMSON | THURSDAY, 4 AUG 2022 12:07PM
Read more: APRA, Choice, ASIC, Margaret Cole, Financial Services Council
APRA and ASIC have already begun reviewing superannuation funds' retirement income strategies, with a view to publishing its findings later this year.
In a speech to the Financial Services Council's Policy Briefing, APRA member Margaret Cole said the regulators will release details and observations later this year as well as examples of better practice "to assist industry to continue to evolve and strengthen its role of supporting their members in this phase of their superannuation journey".
While she acknowledged it has only been a month since funds were required to publish summaries of their strategies, she said trustees must move swiftly towards their formally documented plans "to be more than just a compliance exercise".
"The reality is that superannuation members are retiring every day and supporting members to ensure they are best positioned as they move beyond the accumulation phase of superannuation is an imperative," she said.
"In saying that, solving Australia's long-standing retirement income challenge more broadly will be a marathon, not a sprint, and will require a collaborative whole-of-industry approach to make significant progress, including the important areas of advice and product suitability."
Cole also commented on the upcoming Your Future, Your Super performance test and the next iteration of the heatmaps.
On the funds that stand to fail the test for a second time this year, Cole said APRA has been in regular dialogue with them to ensure they're prepared for the consequences; these funds will not be allowed to accept any new members until their underperformance is addressed.
And while the expansion of the test to Choice products has been put on hold, APRA will release its second Choice heatmap this year, with Cole saying that about half of the worst performing Choice options highlighted last year have now closed or soon will be.
"As I said earlier, what gets measured gets done, and there is much more to be done when it comes to tackling underperformance," she said.
Finally, Cole also touched on whether APRA has a figure in mind for the ideal number of super funds Australia should have and whether the industry has consolidated sufficiently.
While she said the regulator does not have a number in mind, she added: "With the industry still at 145 APRA-regulated funds, of which 105 collectively manage less than 9% of assets, I can say that it is our view that the optimal size of the industry remains a fair distance from where we are now."
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