Making retirement better for Australians

Superannuation is compulsory in Australia. But is this enough to ensure all Australians can enjoy a dignified retirement through a good retirement system?
“It’s critical for us to understand whether or not the Australian retirement income system will be able to meet the needs and expectations of members for decades to come.”
Senior Actuarial Consultant, Mercer
What does the research tell us?
The Mercer CFA Institute Global Pension Index 2022 benchmarks 44 retirement income systems around the world, highlighting the challenges and opportunities each faces.
There are a couple of key callouts in the 2022 Index that we think are critical to developing a successful retirement system.
Where to from here?
Challenges in our environment
Change is underway
Our task now is to put in place the building blocks to help Australians have a better retirement. “Better” is the key word here, as there’s no such thing as a perfect retirement. We know this from our research into other systems around the world. No one has got it completely right.
But all this is costly to implement. And super funds have historically tended to focus on the accumulation phase.
However, Australia has taken some steps forward.
“Introduction of the Retirement Income Covenant is only a beginning. Super funds must develop their strategies and communication so that providing long-term retirement benefits is core to their business.”
Senior Actuarial Consultant, Mercer
Working towards a collective goal
Its important super funds get the fundamentals right, or regulators may step in and force change on the industry.
Mercer is working with a broad range of Super funds to help them drive the next stage of retirement development for their members regardless of their current situation. This includes a focus on items, such as:
- Building a clear understanding of their members’ retirement wants, needs and preferences.
- Establishing metrics to assess members retirement outcomes.
- Identifying different member cohorts and suitable pathways including nudges and soft defaults.
- Enhancing the help, guidance and advice provided to members.
- Reviewing the retirement products provided to fund members.
- All backed by strong and effective communications to build trust and engagement.
We must embrace the momentum generated by SPS 515, the Retirement Income Covenant, product innovation, and the quality of advice review and push forward. The “retirement” voice is getting louder and it will eventually find its way onto CEOs’ priority list.
Super funds must change their mentality. Businesses can no longer be run with a focus on accumulating dollars. Our purpose should be to deliver a dignified retirement for members.
If you’d like to learn more about how superannuation funds can contribute to improve retirement outcomes, please reach out to us.
Senior Actuarial Consultant
Head of Consulting, Investments & Retirement, Mercer
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