Introduction
I would like to acknowledge the Gadigal people of the Eora Nation as the traditional custodians of the land we are meeting on.
I pay my respects to their Elders past and present, and I acknowledge any First Nations Australians in attendance.
Thank you to Mary and the team at ASFA for the opportunity to share a few words.
I want to begin by congratulating ASFA on the 20th anniversary of the publication of its Retirement Standard.
This work is essential in helping Australians prepare for their retirement.
Retirement brings with it a number of unique considerations that can be overwhelming without help along the way.
Fundamentally, people want to know that they are going to have enough.
That they aren't going to run out.
And even as their spending patterns change, they are going to have enough to meet the occasional lumpy expenses.
In theory, quite simple. In practice, it can be complicated.
Our world‑class superannuation system tends to make people think about growing a lump sum through their working lives.
But in retirement, it is an income stream that is of more practical use.
People also are often combining a pension from super with a part of the Age Pension.
Sometimes multiple streams in a couple.
The Retirement Standard is a significant piece of work that tries to cut through some of these complex issues.
How do you convert a lump sum into an income stream.
How long is a lump sum going to last for.
What does my financial picture look like.
And how are my expenses going to change.
Empowering people with helpful tools and information gives people comfort and builds trust in the system.
You do a terrific job with your advocacy on behalf of funds and members to focus attention on strengthening our great system.
Objective of super
In recent weeks, the superannuation system has exceeded $4 trillion.
By size, our retirement system is an envy the world over.
The superannuation funds have excelled in growing the retirement savings of workers.
However, the purpose of the system -
And the message of the ASFA Retirement Standard -
Is for workers to be able to retire with dignity.
I'm pleased to be able to say now that this is the law of the land.
Last week, parliament codified the objective of superannuation as to preserve savings to deliver income for a dignified retirement - alongside government support - in an equitable and sustainable way.
I want to thank ASFA and all of the superannuation industry for supporting this legislation.
And when we talk about the superannuation agenda of the Albanese government -
It is expressed in the objective of superannuation.
As the stewards of the system, we are committed to ensuring that superannuation translates to a dignified retirement for all Australians.
To do that, we have been improving every interaction with the system.
So that from the first dollar of superannuation accumulated -
To the final dollar drawn down -
Australians share in the dividend of the nation's prosperity.
Every dollar of superannuation needs to be paid
Superannuation relies on the premise that wealth will accumulate over your working life to be drawn down upon in retirement.
This all falls over from the outset if workers are not paid what they are owed.
The Tax Office recently updated its data on the superannuation gap.
And it's not good enough.
There was a 6.3 per cent gap in 2021-22 between what was owed and what was paid, even after ATO recovery efforts.
This was a small decrease in percentage terms since 2020-21 - which is welcome.
But it still represents $5.2 billion stolen from workers through unpaid super.
Not good enough.
We don't accept workers being underpaid wages.
We shouldn't accept workers being underpaid super.
Over the last 2 and a half years, we have acted decisively.
We enshrined the right to super in the National Employment Standards.
We've criminalised the theft of superannuation.
And we're fulfilling our election commitment to set new targets for the Tax Office to recover unpaid super.
Yet the most important policy in this regard is our commitment to payday super.
From 1 July 2026, employers will be required to pay their employees' super at the same time as their salary and wages.
Workers will benefit by getting their super earlier and more frequently.
The Tax Office will have greater ability to track employers meeting their obligations.
And it will help prevent the build‑up of debts of unpaid super, which are too often lost forever if a business becomes insolvent.
The legislation is being drafted right now and will be released for consultation soon.
This is one of the biggest reforms to the payment of superannuation since it was introduced over thirty years' ago.
And it will deliver for workers.
Funds must deliver strong investment returns
We need to make sure super is paid on time.
And then, for most Australians, it is over to the funds to be managed before retirement.
There's been plenty of talk in recent weeks about how funds are using member's money.
Let me be abundantly clear.
The government expects every dollar to be used and invested in the best financial interests of members.
And the independent regulator - APRA - has the full backing of government to uphold the law.
Funds need to procure services to meet their members' needs.
And there will be other expenses that any financial services institution would reasonably be expected to disburse.
But there is a high bar of governance and accountability needed when funds are spending the retirement savings of workers.
We're proud to have supported APRA's work in increasing the transparency of fund expenditure.
And we've also got a strong record on lifting the standard of how funds invest member funds.
Upon coming to government, the annual superannuation performance test only applied to around 70 MySuper products.
It has now been expanded to around 650 products, including the choice sector.
The test now covers around 80 per cent of benefits held in the accumulation phase.
This drives accountability for trustees to deliver good investment returns.
And it delivers transparency for members to know how their fund is performing.
And it's working.
The tail of underperformance is being cleaned up.
After almost 100 products failed last year, that number is down to 37 this year.
Good progress - and more to be done to ensure funds invest in the best financial interests of members.
Superannuation is judged by its member service
I've said for some time now that the superannuation system will increasingly be judged by the standard of service offered to members.
The system has been excellent at accumulating wealth - and it will need to continue to do this.
But, just like any other financial institution, it needs to offer a good customer experience.
The government has made its views clear.
Upon coming to government, we finalised one of the last outstanding recommendations of the Hayne Royal Commission by legislating the Financial Accountability Regime.
We introduced and passed this legislation in virtually the same form as what our predecessors introduced and should have passed in the last parliament.
One change we made was to embed a responsibility for funds to have an executive who is responsible for member service standards.
And there are obligations and penalties for failing these standards.
Since I elevated the current service standard failings into the public policy conversation, ASIC has made this a key strategic priority.
And that will drive improvements.
And I welcome the recent guidance note that ASFA has published around death benefits.
However, the standard is still lagging.
So we're prepared to go further, and I've tasked Treasury to advise me on what will lift member outcomes.
Which is what we all want.
Ensuring the retirement phase delivers for members
Member outcomes will be increasingly determined in the retirement phase as more members start to transition to that stage of life.
In recent weeks, the Treasurer announced at your conference the government's reforms to deliver a better retirement for more Australians.
These reforms will give retirees more peace of mind.
Help them make their super go further.
And provide more support to navigate retirement.
These changes will empower retirees through better information, better products and better transparency.
We want to ensure that every member in the system is catered for.
And challenge funds to do as good a job in the retirement phase as they have done in the accumulation phase.
Conclusion
So, in sum -
Every dollar of superannuation paid.
Every dollar invested in members' best financial interests.
And every dollar contributing to a dignified retirement.
Our superannuation policy agenda is comprehensive.
And the thread that binds it together is the objective of superannuation.
A system that has the member at the centre.
That's the objective of super.
