Recent research by The Conexus Institute identifies significant dispersion in the operating environment for Australia’s superannuation funds. This impacts aspects of fund investment models including internalisation, private assets and offshore investment teams.

Australia’s policy of stapling workers to their first workplace pension scheme for life bears many of the characteristics of the lifetime model floated by the UK government. The Australian market is evolving and this impacts the role of the employer.

A growing number of funds have warmed to the status quo after tweaking their strategic asset allocation to make sure they don't fail. However, a number of academics and researchers argue that the current test is not in members' best interests.

Submission to Treasury on design options for the annual superannuation performance test. Proposes a three-metric test for all multi-asset portfolios, with the need to pass at least two of the three metrics

Initial industry reflections on the Your Future, Your Super consultation paper. The paper explores design options for the annual performance test.

The retirement industry is currently operating in a kind of purgatory where business, policy and regulatory challenges are holding back the provision of good retirement outcomes for all retirees.

Calls for a package of policy and regulatory solutions to address three major problems (weak competition, difficulties for many retirees to engage and make effective choices, and business case challenges for super funds).

Submission to Senate Economics References Committee. The submission by the Conexus Institute focuses on four of the matters listed in the Terms of Reference (TOR) where we believe that we can assist the Committee in their deliberations.

Submission to Senate Economics Legislation Committee. The Conexus Institute supports the legislation of an objective of superannuation and the objective detailed in the Superannuation (Objective) Bill of 2023.

Submission to Treasury by the Conexus Institute. At the foundation of this submission is a series of 13 essays that explore topics of potential interest to policymakers and put forward recommendations for consideration.

Super Consumers Australia says retirees deserve some peace of mind on whether their fund is doing a good job managing their retirement income.

Australia’s biggest industry funds, AustralianSuper and Australian Retirement Trust, are dominating super fund inflows, while private sector players AMP, Insignia, Colonial First State and BT have been losing funds, according to a new report by the Conexus Institute.

All super funds are being called on by the government and regulator to make more progress on providing retirement income solutions to members.

Research from The Conexus Institute finds while a handful of big profit-for-member funds rank well for both assets and growth, ESG-focused funds Australian Ethical and Future Super stand out for attracting above-system flows.

In FY23, the top eight funds, led by AustralianSuper, took 80% of natural flows. AustralianSuper saw a $9 billion switch, down from $14.5 billion. APRA data shows a broader market slowdown in switching.

In the first of a series of articles analysing the latest APRA superannuation asset data, The Conexus Institute conclude that the eight largest profit-for-member funds increased their market share in FY23 by about 2 per cent. Meanwhile, the merged Care Super/Spirit Super looks set to be inducted into the so-called “big fund club”.

As members shift from saving to spending in their super, investment teams will likely face new demands. Different retirement goals may require separate portfolios and managers. Aware Super and TelstraSuper shared their strategies.

Australia’s biggest super funds are quietly plotting their path into playing a bigger role in financial advice, committing to more personalisation and better education to help build retirement confidence among members alongside advisers.

As Treasury releases its discussion paper on regulation of the retirement phase, The Conexus Institute argues that an affordable trustee-directed mechanism should be facilitated so that all super fund members can receive some retirement guidance.

Highlights from the ASIC Annual Forum, 21–22 November 2023.

Industry super funds are under immense pressure to rethink their traditional low-cost operating model as their loyal members now demand significantly more service - and the government and regulators are prepared to wield a big stick.

Margaret Cole, deputy chair of APRA, has made clear the prudential regulator is satisfied that the Your Future Your Super performance test is having its intended impact.

When superannuation was just a twinkle in the eye of Treasurer Paul Keating, in the years after the floating of the dollar, the Australian economy was vulnerable to sharp swings in global capital flows.

The CIO Is still considered the shot caller, but the fundamental changes that the super system is experiencing means funds could adopt a more diffuse operational model and power will shift away from the “masters of the universe”.

Unlisted assets can enhance super fund portfolios. Benefits include access to a broader opportunity set that affords better diversification and more return-seeking opportunities. Excellent governance is the entry ticket to these opportunities.

Financial advisers shouldn’t feel that super funds moving into retirement advice will outflank them. Advisers will survive, and likely prosper, as they have all the ingredients to provide the crème de la crème of retirement advice.

To adopt best practice in retirement, super funds need to make it a top priority, resolve their organisational structure, implement strong executive-level leadership and consider the creation of a retirement committee.

More regulatory pressure on valuation practices means big funds run the risk of missing out on deals. But with Australia now at the forefront of defined contribution pensions, should GPs get with the program?

There are five possible pathways to retirement solutions, but only two are in place with the missing pathways all involving some form of trustee direction. Trustees will be pivotal in helping provide straightforward solutions to members who are disengaged or unprepared to pay for financial advice, leaving independent advisers to deal with those who want a comprehensive and highly personalised solution.

Review and reflections from the 2023 Retirement Conference, co-hosted by The Conexus Institute and Conexus Financial. By David Bell and Geoff Warren.

Treasurer Jim Chalmers is expected to kick off a public consultation about retirement income settings, as the landmark intergenerational report shows superannuation will take significant pressure off the age pension over the next four decades.

The 2023 Retirement Conference, a joint initiative of the Conexus Institute and Conexus Financial, showcased an industry that is moving forward on retirement, but is being directed to do more.

Australia’s biggest super funds are on an overseas hiring blitz in a bid to reduce expensive external management fees and get in on lucrative private equity and infrastructure deals earlier, as the $3.5 trillion sector outgrows local markets. Quotes Geoff Warren on scale effects.

APRA and ASIC’s joint thematic review into how super funds have gone about implementing the Retirement Income Covenant (RIC) reveals insights into the challenge faced by the entire superannuation ecosystem, including industry, regulators and policymakers.

Size is “not an automatic win” for superannuation funds and comes with significant disadvantages and challenges, according to Geoff Warren, director of research at The Conexus Institute, challenging prevailing wisdom that greater scale necessarily delivers better outcomes for members.

Retirement plans provided by financial advisers should be superior to those provided at scale by super funds. The comprehensiveness of the advice service provided by planners means they can account for the personal circumstances and needs of their clients and provide a more holistic solution.

Super funds are required to develop retirement income strategies that deliver income over a retirement that may span decades. Waiting to see what happens is not going to work as an assessment technique. So how might you establish if a solution is any good?

Explores approaches to quantitative assessment of retirement income strategies, based off research paper by David Bell and Geoff Warren.

This paper explores how quantitative assessment may be undertaken, supported by illustrative examples, to enhance the design and assessment of retirement income strategies.

As Australian superannuation funds evolve and get bigger they face a question of whether to copy the organisational structures of their bigger, more sophisticated Canadian counterparts, or find their own way that more adequately befits some of their unique features and better serves members. Amanda White looks at the Australian superannuation market evolution and what it can learn from Canada.

Underpinning consolidation in the super industry is the idea that larger scale is beneficial for superannuation fund members. But that’s not necessarily true. A bigger fund is no guarantee of better returns, writes Geoff Warren.

Explores the impact of the Government’s review of the Your Future, Your Super performance test

Explores the impact of changes to the Your Future, Your Super performance test on dedicated socially responsible investment options.

Big and small funds alike can do well for their members, and what's more important than size is how they use it. But the risks of having a highly concentrated industry have been "underplayed", according to Geoff Warren.

Is it time to abandon ‘the size is good’ mantra that is helping drive a wave of merger activity among super funds in Australia?

Across the super industry there exists large dispersion amongst funds along the three dimensions of size, age and gender. This creates challenges for the superannuation ecosystem.

While Commonwealth Superannuation Corporation (CSC) is Australia’s largest pension fund, platforms have the largest proportion of their members in retirement. This creates an interesting dynamic around who will be the leader in the retirement segment.

The prudential regulator wants to lift the governance standards of superannuation funds to insist on more timely revaluations of unlisted assets to protect new members from buying in at artificially high prices.

Combining size and inflow rates creates a much richer picture of the super fund landscape (for APRA regulated super funds). We are able to divide the universe into four quadrants based on these two dimensions. Some funds are in a strong position and the future is bright. For others there is uncertainty and work ahead.

When APRA releases its fund-level superannuation statistics for APRA-regulated funds the race is on to analyse assets under management. This measure translates directly to scale and is the measure that garners most attention. However net inflow is just as, if not more, important. It informs future scale as well as the ability to invest in illiquid assets.

Student groups at UNSW recently took on important challenges faced by the superannuation industry. In projects designed and led by MetLife, Aware Super and The Conexus Institute, students were exposed to current challenges in the areas of engagement and default fund design.

Do you view a super fund as a product provider or as a benevolent fiduciary? That was the question asked of Minister Stephen Jones at the recent Conexus Financial Political Series lunch.

The Your Future, Your Super (YFYS) performance test is a classic case of a problem which has flaws, is easy to critique but hard to fix. It is a tough situation for policymakers, highlighting the challenges of effective policy design in complex systems.

The Your Future, Your Super (YFYS) performance test is a classic case of a problem which has flaws, is easy to critique but hard to fix. It is a tough situation for policymakers, highlighting the challenges of effective policy design in complex systems.

Minister for financial services Stephen Jones didn’t mince his words in setting out his key challenge to the super fund sector: deliver an excellent member experience. This built on similar sentiment he expressed at this year’s Retirement Conference.

APRA’s annual release of fund-level superannuation statistics provides a good opportunity to reflect on the state of Australia’s superannuation industry. There are some fascinating trends, some of which seem set to persist.

We’ve just released new research recommending the next essential step for development of a healthy retirement system following on from the introduction of the Retirement Income Covenant (RIC) and the first round of retirement income strategies (RIS).

The superannuation industry is grappling with the complexity of delivering retirement solutions. Perhaps the only way to assess how well they work in the future is to start assessing them right now.

Collaborative research with FTSE Russell, An LSEG Business, ASFI and RIAA explores the performance test tracking error created by different ESG and sustainability activities.

Super funds’ activities in ESG, sustainability and carbon transition result in relatively high levels of tracking error under the Your Future, Your Super performance test, increasing the risk of funds failing the test.

New research confirms the “anecdotal concerns” of the superannuation industry that the current design of the Your Future Your Super test makes responsible investing a no-go zone.

The Retirement Income Covenant (RIC) represents a significant milestone in the development of a high quality retirement income system for Australians. As super funds develop their Retirement Income Strategies (RIS), the next essential next step is to assess the quality of the RIS they are delivering to create accountability, and provide a framework for ongoing improvement.

Collaborative research with Associate Professor Geoff Warren (ANU) outlines how retirement income strategies can be assessed.

Research paper exploring a sustainable level of YFYS performance test tracking error and the opportunity cost of the constraints.

The Conexus Institute has just released new research exploring how much the Your Future, Your Super (YFYS) performance test will constrain investment strategy resulting in an opportunity cost to consumers of $3.1 billion per annum.

Financial Services Minister and Assistant Treasurer Stephen Jones announced a review of the Your Future, Your Super (YFYS) reforms earlier this year, including the performance test, applied to MySuper default options, which is arguably its most contentious element. The deadline for submissions closes on October 14.