Speaking at the AFR Super and Wealth Summit earlier this week, Minister for Financial Services Stephen Jones noted that in the past, Australia’s super funds have largely been assessed based on the accumulation of members’ retirement savings.
“This is a key metric for its success. A metric – might I add – that it has generally hit out of the park. But more and more, this is not going to be the only marker against which success is judged,” he warned.
Instead, super funds will be judged by the standard of member services offered throughout an individual’s working life and retirement, Jones stated.
“Members are not judging their superannuation fund against another fund. They’re judging their fund against the service they receive from their bank or their insurer.”
If members are not receiving an adequate level of service from their super fund, Jones cautioned that Australians may begin to question the value proposition of superannuation altogether.
Namely, he referred to the objective of super, which has been highly debated in the sector. The Superannuation (Objective) Bill aims to enshrine the objective of super being “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
Moreover, the minister said that the expectations placed upon super funds to deliver to members is only set to increase and remains a key focus for the government.
“This is a key strategic priority for ASIC as well and they will continue to work across industry to hold funds to account. Members are going to want help to meet their retirement goals, to be in the right products and to be supported when things go wrong,” Jones continued.
“Upon coming to government, the standard was not good enough. Pleasingly, this has started to turn around as funds have dedicated time and resources to lifting their performance.”
Jones’ speech echoed previous comments made at the AFR Super and Wealth Summit in 2023, when he lashed out at super funds over a “catalogue of poor customer experiences”.
“Unresponsive, slow, and not member‑focused” was how super funds were described by Jones in October 2023.
“This is a $3.5 trillion industry. This is not the standard that members will accept and it’s certainly not the standard the government will accept, and it shouldn’t be the standard, frankly, that funds accept,” he said.
“With 5 million Australians either at or approaching retirement, funds must urgently lift their game.”
At the time, he pointed to a targeted review by ASIC in late 2022 that found that approximately 20 per cent of funds failed to consistently respond to complaints within the mandatory 45-day timelines.
He also highlighted a joint review by the Australian Prudential Regulation Authority (APRA) and ASIC in 2023 which concluded that funds exhibited a “lack of progress and insufficient urgency” in embracing the retirement income covenant (RIC).
