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📍 Sydney, July 11, 2025 — A new report by law firm Mills Oakley has revealed that a significant number of Australian superannuation funds are failing to adequately support members transitioning into retirement, despite regulatory obligations under the Retirement Income Covenant (RIC).
The Covenant, introduced on 1 July 2022 as part of the Your Future, Your Super reforms, requires trustees of APRA-regulated funds to develop and implement strategies that help members achieve better retirement income outcomes—not just accumulate savings.
đź“Š Key Findings from the Report
- Of the 80 funds assessed, only 30 demonstrated strong strategic alignment with the Covenant’s objectives
- Many summaries lacked specificity, detail, or were not published at all
- Smaller funds were more likely to adopt minimal, compliance-focused approaches, while larger funds showed greater strategic maturity
- The report identified a “stark divide” between the best and worst-performing funds
📉 Regulatory Concerns and Strategic Gaps The report, titled Measuring Up: How Super Funds Are Responding to the Retirement Income Covenant, highlighted persistent gaps in compliance, member engagement, and strategic implementation. Mills Oakley warned that some trustees may be deprioritizing retirement strategies due to regulatory fatigue, despite mounting expectations from regulators.
Both APRA and ASIC have previously expressed concern over the lack of urgency among trustees in measuring and improving retirement outcomes. A joint review in 2024 found that only a minority of funds had concrete plans to address data gaps and member needs.
📅 New Standards Raise the Bar The findings come as APRA’s enhanced Prudential Standard SPS 515 takes effect from 1 July 2025, requiring trustees to conduct triennial reviews of their retirement income strategies. These reviews must assess effectiveness, member outcomes, and alignment with evolving demographic and economic conditions.
🗣️ Industry Implications With Australia’s population aging and more members entering the retirement phase, the report underscores the urgency for super funds to shift focus from accumulation to retirement readiness. Regulators are expected to closely monitor compliance and may take further action to ensure trustees meet their obligations.
For further analysis, see Mills Oakley and regulatory commentary from Financial Newswire.
