Most Australians have no idea whether their super fund is ready to help them with their retirement. Not ready in the sense of having made decent returns so far, but ready for the actual job it will need to do before, and after, the day your work income stops.

And why would you? The system doesn’t make it easy to find out. The government’s performance test will tell you if your default MySuper fund passed or failed on investment returns and fees, but it is a narrow, product-focused measure (that most people don’t understand anyway) and it ignores a fund’s broader services and capability. It is like judging a car by petrol consumption and top speed, with no idea whether the brakes work, the seatbelt will hold, or even where it plans to drive.

There are strategies for choosing the right nest egg. Credit: Karl Hilzinger

Last week, the Treasury Department finally released a consultation paper on a new retirement reporting framework for the super industry. It promises greater transparency on the products and services funds offer in retirement and how well they deliver — but the data won’t be public until 2028 (and we’ll likely still have to dig to find the detail). By then, the biggest wave of baby boomers will have already crossed into retirement.

At the same time, Australian Prudential Regulation Authority deputy chair Margaret Cole told the Conexus retirement industry conference that while super funds are making progress under the retirement income covenant – a three-year push to improve services for retirees – it’s patchy, and not a single one rated their own performance as “excellent” in the latest survey for APRA and the Australian Securities and Investments Commission.

Some funds are acting on the call for change, others remain stuck in accumulation-phase thinking. The gap between where the industry is today and where it needs to be is still wide, and if we wait until 2028 to shine a light on it, millions........

© The Age