ASIC commissioner Simone Constant said only one-third of Aussies on the cusp of retirement were confident they would be financially comfortable when they left the workforce. (Source: AAP\/Getty) <\/p>\n
Australian superannuation funds<\/a> have been slammed by the corporate watchdog over failing to properly communicate with retirees. Millions of Aussies will enter retirement<\/a> over the next decade, but there are fears they won’t have the information they need.<\/p>\n An ASIC review<\/a> has examined the practices of 12 super funds, who are collectively responsible for more than 9.3 million super member accounts<\/a> and $1.14 trillion in member assets. They represent 45 per cent of APRA-regulated funds by member assets.<\/p>\n The regulator raised the alarm that many Aussies may not have the information they need to make \u201cconfident and informed\u201d decisions about retirement<\/a>, pointing to a “glaring retirement communications gap”. It also found some trustees offered \u201cone-size-fits-all\u201d retirement communications aimed mainly at pre-retirees<\/a>, rather than those already in retirement.<\/p>\n RELATED<\/p>\n ASIC commissioner Simone Constant said more than 1.5 million members were in the retirement phase<\/a> now and had about $575 billion in super assets between them. More than 2.5 million Aussies will enter retirement over the coming decade.<\/p>\n “However, ASIC’s Moneysmart research suggests only one-third of Australians on the cusp of retirement are confident that they will be financially comfortable<\/a> once they leave the workforce,\u201d Constant said.<\/p>\n \u201cIt is important now more than ever for superannuation trustees to focus their attention on providing meaningful, and timely retirement communications to their members that can meet their needs.<\/p>\n \u201cMoreover, members entering retirement typically hold larger balances, require more tailored solutions and expect high-touch support.\u201d<\/p>\n Do you have a story to share? Contact tamika.seeto@yahooinc.com<\/a><\/p>\n It comes after a Grattan Institute report<\/a> earlier this year found 80 per cent of Australians found retirement planning complicated and about 60 per cent expected their retirement would be financially stressful.<\/p>\n It found few retirees were drawing down on their retirement savings as intended, with many \u2018net savers\u2019 growing their super balance for decades after retirement.<\/p>\n Four in five retirees were steered into account-based pensions, which require them to manage their spending to avoid the risk of outliving their savings<\/a>.<\/p>\n Half of those on an account-based pension draw their super at legislated minimum rates, which leaves 65 per cent of balances unspent by average life expectancy.<\/p>\n ASIC\u2019s review found there was little evidence trustees were tailoring their messaging and delivery methods to meet the diverse needs and preferences of their member base, including those already in the retirement phase.<\/p>\n Constant said this was a \u201creal missed opportunity\u201d given the size of the \u201cretirement wave\u201d that was already breaking.<\/p>\n \u201cThe clear message we are sending to super trustees is a one-size-fits-all communications approach won’t work for all member groups, as it may not provide the quality of information customers need to make confident and informed decisions about retirement,\u201d she said.<\/p>\n Trustees were also found to have largely overlooked the specific needs of First Nations members, vulnerable members, and culturally and linguistically diverse members. None of the funds reviewed had specific retirement communications for vulnerable members.<\/p>\n It comes after the watchdog criticised super funds over their handling of death benefit claims<\/a> earlier this year.<\/p>\n It called for an overhaul, pointing out excessive delays, poor customer service and ineffective claims handling procedures.<\/p>\n In one instance, a fund took more than 500 days to pay a death benefit of around $100,000 to a First Nations woman who was grieving the loss of her husband.<\/p>\n Get the latest Yahoo Finance news – follow us on Facebook<\/a>, LinkedIn<\/a> and Instagram<\/a>.<\/p>\n