Super funds Vs government for retirement outcomes – what members want

There is a lot of noise at the moment in the super industry over accessibility to advice and government reform for retirement income solutions, versus industry-provided solutions for members. 

In February 2024, new research has given some insight into how a sample of Australians weigh-in on these areas. 

The findings of the research conducted by C|T Group on behalf of the Financial Services Council (FSC) was released in a report made available on the Financial Services Council website.[1] 

The research involved an online survey responded to by more than 2,500 Australian voters aged 18+ between the dates 22 January and 1 February 2024. Respondents were representative across age, gender, location, education and 2022 Federal Election vote. 

The following key questions were asked: 

Regarding trust to make decisions on retirement product:

  • “Who do you trust more, the Government or yourself, to make decisions about which retirement product/s you use when you are retired?”
  • “Who do you trust more, the Government or super fund, to make decisions about which retirement product/s you use when you are retired?”
  • “Who do you trust more, the super fund or yourself, to make decisions about which retirement product/s you use when you are retired?”


Regarding income management and retirement product advice:

  • “When you retire, how likely do you think you would be to seek advice on retirement products?”
  • “And where would you rather get advice on retirement products from?” (Options included: A financial advisor, my super fund, an adviser from the Federal Government and Other)
  • “Thinking about your retirement, how confident are you that you will be able to manage your income and investments in your retirement effectively?”


Regarding preferred priorities for government policy in superannuation:

  • “Thinking about the role of the Federal Government below is a list of priorities others have mentioned. Please indicate what you think should be the top 3 priorities for deciding superannuation policy?” (12 options were provided).


A summary of the responses to these questions is as shown below. Full details can be found in the report provided on the FSC website.

[1] https://fsc.org.au/resources/2704-fsc-2024-ct-research-report/file

What the results tell us:

  • When it came to who the voters trusted most to make decisions about which retirement product(s) to use when they are retired – the voters (overall) trusted themselves over the government and their own super funds to make those decisions for them.
    • The voters also (overall) trusted their own super funds over the federal government to make decisions on such matters.
  • When it came to how likely voters were to seek advice on retirement products in the future, and where they would seek that advice from – the voters (overall) were likely to seek this advice, and preferred this advice to come from a financial advisor over other sources, including their own super funds!
  • Approximately half of the voters were either very confident or somewhat confident that they would be able to manage their income and investments in their retirement effectively.
  • The voters (overall) had a preference for the government to focus its efforts in super on ensuring super funds generate competitive returns; supporting low-income Australians to save for retirement; and making the superannuation system simpler and more transparent.
 

In other words, this research provides some evidence to the notions that members trust themselves to make decisions on retirement products, but also wish to be empowered by receiving advice (preferably by financial advisors); and that they prefer the government to focus on ensuring the system is effective, equitable and simple, above other priorities.

With the government and regulators’ recent push on the industry to ensure funds are assisting members in accessing retirement solutions, the information provided by this research can provide industry players with a sense of what members really want, and where members would like super funds’ and governments’ efforts to be focussed.

Daniel

About the Author:

Daniel Bartlett is an actuarial consultant at McGing Advisory & Actuarial. Daniel and the team at McGing provide superannuation, insurance, investment, and actuarial advice for organisations.