FSC takes initiative setting RIC benchmark | Australian Markets

The Financial Services Council (FSC) has sought to take the lead on setting a framework for superannuation funds assembly their obligations to the Government’s Retirement Income Covenant by publishing a framework which it says can act as a benchmark.

According to FSC chief government, Blake Briggs the framework will probably be a benchmark for the industry to measure itself towards to make sure superannuation funds are serving members within the best approach attainable.

“It outlines what a good versus a mature superannuation fund with a retirement proposition should offer to their members,” he stated.

In delivering the framework, the FSC labored with NMG Consulting with the resultant doc defining member cohnorts, “what good looks like” and success measures.

According to the FSC the framework is anchored round 4 basic ideas:

1. Retirement is a service, not simply a product proposition. Retirement methods should think about engagement, training and advice in tandem with financial merchandise.
2. Retirement is particular person. Household funds and particular person targets drive retirement wants.
3. Start early. Retirement methods should think about member wants on a whole-of-life foundation, beginning with early engagement.
4. Keep it easy. The focus needs to be on offering the precise degree of help and steerage and simplifying the expertise for members.

“Our framework demonstrates that a trustee’s strategy should involve tailored engagement with superannuation fund members based on their life stage and the information the trustee readily has about them,” Briggs stated. “Superannuation funds should have this engagement from the day a member gets their first superannuation contribution, across the lifecycle, to maximise retirement outcomes when a person finally retires.”

“The default-heavy design of Australia’s superannuation system is having the unintended consequence of permitting people to be disengaged, particularly as they close to retirement, when the stakes are highest.

“Ultimately everyone’s needs and goals are different, and best practice involves superannuation funds facilitating access to personal financial advice. A one-size-fits-all approach often falls short of giving people the flexibility and support they need to get the most out of their superannuation,” Briggs stated.