Now that the Retirement Income Covenant (the Covenant) has been in place for several months, it’s time to take stock of our position as an industry and reflect on how we’re tracking on delivering on our obligations to members, ensuring they can enjoy retirement with confidence.
To assist with this, TAL has been proud to support the research and development of Deloitte’s new Retirement Solutions Assessment Framework. The Framework is designed to help funds develop a retirement solution to suit members and meet obligations under the Retirement Income Covenant and help to weigh up their options around product features, pricing, partners and other key criteria.
What have we learnt so far?
Our experience has shown that when designing retirement solutions for members, it’s essential to take a member-insight led approach to retirement strategy in every step along the way, encompassing product design, member journey, servicing and operating models. In this way, trustees can develop retirement propositions that are tailored to meet the needs of specific cohorts of members.
We know that it’s important to understand how individual member circumstances, including demographic factors and psychological preferences influence how members will spend their super, and by helping them to think about retirement in phases, we can demonstrate the value that different solutions provide for different stages of life.
Continuing the retirement conversation
As an industry, we are realising that to deliver on the lifetime value of superannuation, we need to work together to create robust and accessible retirement solutions for all Australians. We can also see parallels between the early days of the group insurance system and the way the retirement income system is developing today.
These similarities provide a unique opportunity to learn from that evolution and address challenges early. For instance, we know that in order to ensure trustees can achieve the best possible outcomes for their members, it’s critical to have clear governance frameworks in place for funds to use in selecting potential retirement solutions providers.
There's help at hand
The Deloitte Retirement Solutions Assessment Framework was launched in February to align with the ASFA Conference in Brisbane and even though it’s early days, it’s already made an impact – helping to solidify thinking and ignite discussion.
The framework in practice
Designed to assist super funds that are seeking to explore available retirement solutions or to outsource a component of their retirement solutions, the Framework helps to satisfy obligations under the Covenant while meeting member retirement needs. It comprises a structured set of value-weighted detailed considerations by which to compare and assess solution providers and their solutions. This can be used in a process similar to how funds seek to fulfill their group insurance obligations under APRA Prudential Standard SPS 250.
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