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The sole purpose of superannuation is to provide income for retirement, not that you’d notice.
After more than 30 years of our compulsory super system, super funds have enabled Australians to grow their retirement savings to levels their parents and grandparents could only dream of.
What funds have not done so well is to guide their members through the process of retiring, provide them with retirement products that are fit for purpose and give them the confidence to draw down on their savings without the fear of running out of money.
The government tried to give funds a push along to develop better retirement products and services with its Retirement Income Covenant (RIC) but, since its introduction in 2022, progress has been glacial.
Good to know
The Retirement Income Covenant set out three objectives for funds:
- To maximise members’ expected retirement income
- To manage risks to that income such as inflation and market setbacks
- To provide members with flexible access to their savings during retirement.
Learn more about the Retirement Income Covenant.
Innovation in the retirement phase of super has been so slow that the last of the Baby Boomer population bump, currently aged 61, is likely to be retired well before their super fund catches up with them.
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