#22. Co-hosts Sarah Penn and Neil Benson chat with Anthony Saliba, Partner at Deloitte Actuarial Consulting.

Highlights

• Retirement income measurement challenge: Determining if retirement income solutions are working is complex, especially with new best practice principles released by Treasury.
• Best practice principles explained: Treasury’s principles aim to guide trustees in supporting retirees, but are non-binding and allow for flexibility and market-driven solutions.
• Principles-based vs. prescriptive rules: The industry favours a principles-based approach; there is ongoing discussion about whether these guidelines will eventually become enforceable standards.
• Realities for smaller funds: Some super funds may decide to exit members into specialist retirement funds rather than investing heavily in retirement offerings for a small retiree base.
• Complexity for members: Switching from accumulation to retirement products and navigating financial advice, age pension eligibility, and new lifetime income products creates challenges, especially for those without access to personal advice.
• Emphasis on member confidence: Leading funds invest in digital tools and education to improve member confidence and provide support beyond traditional advice models.
• Measuring outcomes: Funds should use objective, evidence-based data to evaluate retirement strategies and avoid “marking their own homework.”
• Personalisation and cohorts: True hyper-personalisation is aspirational; most funds cohort members by life stage and balance, with some moving toward more nuanced demographic analysis.
• Data access limitations: Lack of access to data like home ownership and marital status hampers more tailored solutions; innovative tools to gather member data can help bridge this gap.
• Regulatory barriers to engagement: Strict personal advice laws prevent funds from using member data for targeted communications and are seen as a roadblock to better member engagement.
• Drawdown patterns: Most retirees draw the minimum required, sometimes due to uncertainty or default settings; there are calls to encourage greater, more sustainable drawdowns early in retirement.
• Missed opportunities: Members often pay unnecessary tax or miss out on age pension entitlements simply by not taking key actions (like moving to drawdown phase or promptly applying for the pension).
• Annuities and product innovation: Lifetime income products can help manage longevity risk but suffer from low uptake; the industry is seeing product innovation and working toward better “solution” messaging.
• Asset-rich, income-poor issue: The system facilitates cases where people use super to increase home equity and then qualify for age pension; potential for equity release products and need for policy refinement.
• Key takeaway for trustees: Always use an evidence-based, objective approach when measuring outcomes and designing solutions, and clearly communicate trade-offs to help members make informed decisions.

Guest: Anthony Saliba

• Connect with Anthony Saliba on LinkedIn
• Follow Deloitte on LinkedIn
• Visit Deloitte website

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