POWERED BY MOMENTUM MEDIA
What do super fund CEOs think of the RIC?
A roundtable of super fund chief executives in September has shared with APRA their views on the Retirement Income Covenant (RIC).
CEOs on the panel include Ross Piper from Australian Ethical Superannuation, Luke Symons from legalsuper, Christopher Davies from Telstra Super and Andrew Peterson from Diversa Trustees.
Discussing the RIC, which was introduced in July 2022, the CEOs discussed how they could improve their practices and data collection.
APRA has already conducted a joint thematic review with ASIC of 15 trustees responsible for 16 funds and their progress in implementing the RIC over the past year, how they understood member needs, offered assistance to members and executed their strategy.
The thematic review had identified issues around designing fit-for-purpose assistance, overseeing strategy implementation and understanding member needs.
Following this, APRA said it will issue a survey to trustees shortly to understand what improvements they have made across key priority areas.
APRA said: “CEOs discussed their responses to areas of improvement outlined in the report. They shared ideas on achieving quick wins in delivering cost-effective retirement income solutions, such as leveraging external service providers and technology.
“The CEOs stressed the importance of using data to understand their members’ needs and build their confidence in the retirement phase, highlighting the need for adopting strong data security practices if collecting personal data.
“A positive development noted was an increasing understanding and focus on retirement across funds, rather than retirement being seen as a niche area. Although progress has been made, the CEOs collectively recognised that significant efforts are still required to develop retirement offerings for members that will truly meet their needs.”
As well as the RIC, the 10 CEOs also discussed the sustainable finance disclosures that aim to enhance transparency and decision making. This will involve super funds implementing new systems and governance processes to meet climate reporting requirements.
Panellists said they had already outlined steps such as working with independent experts, organising internal workshops and better due diligence.
“The CEOs agreed that maintaining a static stance regarding disclosure and transparency requirements is no longer viable, particularly as members expect trustees to stay true to their commitments,” it said.
“Additionally, the CEOs acknowledged that the management of sustainable finance issues has evolved, involving not only the investment team but increasingly also other internal teams like legal, marketing, risk, and compliance.
“Common challenges of funds include obtaining the right expertise internally and externally, the lack of standardised taxonomy, ensuring investment screens operate effectively, oversight of third-party providers, and ensuring accurate wording in all marketing materials.”
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Super funds had a “tremendous month” in November, according to new data.
Australia faces a decade of deficits, with the sum of deficits over the next four years expected to overshoot forecasts by $21.8 billion.
APRA has raised an alarm about gaps in how superannuation trustees are managing the risks associated with unlisted assets, after releasing the findings of its latest review.
Compared to how funds were allocated to March this year, industry super funds have slightly decreased their allocation to infrastructure in the six months to September – dropping from 11 per cent to 10.6 per cent, according to the latest APRA data.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
