Super funds must deliver ‘guidance’, not just returns, says AustralianSuper CEO

Speaking at the National Press Club, chief executive Paul Schroder said the system was too complex, with less than half of Australians feeling confident about retirement and only one in two applying for the Age Pension when eligible. More than 70 per cent of members want their super fund to help them navigate the system.

“Guidance is no longer a luxury, it’s an expectation,” Schroder said. He pointed to members at opposite ends of the retirement spectrum: Claudia, a 17-year-old just starting work, and Bachir, a 25-year AustralianSuper member nearing retirement.

“For Bachir, that means two accounts, two sets of fees, and far too much hassle. A streamlined system is an obvious solution,” Schroder said, advocating reforms to allow members to move seamlessly between working and drawing down super.

The fund is also calling on government to enable secure sharing of relevant data with super funds, allowing members to view their full retirement picture, including Age Pension entitlements.

“This will allow funds to give simple, easy and tailored guidance to members when they need it most,” Schroder said.

“With guidance and information at the right time, we could support – Bachir and Claudia – to feel confident about their savings, about how much they can spend, about what choices they have, and what decisions they should make,” he added.

The CEO emphasised that retirement today is more dynamic and transitional than traditional models assumed, with many Australians returning to work part-time or in new roles. As such, he noted, super must adapt to provide both flexibility and certainty.

Advice – or “guidance”, as Schroder calls it – is central, with AustralianSuper aiming to deliver personalised guidance to its projected 5 million members in 2035, supported by AI.

“We have a world-class savings system. We need to build a world-class spending system. To do this, we need to meet members’ changing expectations of us. Super funds must run to keep up,” he said.

“Members want strong returns. Personalised guidance. Secure digital tools. They want all of that in an app in their pocket, at a competitive price, from institutions they trust, at any time of day or night.”

Super tax hike ‘kind of logical’

Schroder also defended super’s tax concessions as a cornerstone of the system.

“We must also recognise that tax concessions are central to the success and fairness of superannuation – they’re not giveaways or foregone consolidated revenue – they are part of the long-term social contract that encourages Australians to save for retirement,” he said.

“As the system matures, these concessions have become more targeted and equitable,” Schroder said.

He highlighted that reforms such as contribution caps, higher taxes for high-income earners, and transfer balance caps in retirement have made the system more equitable, and he suggested further fine-tuning could continue that evolution.

“Reviewing tax thresholds for both high and low incomes could be a continuation of that evolution,” he said.

“Policymakers, regulators and the super industry must continue to evolve the system to deliver a sustainable and equitable retirement for all. Concessional tax arrangements are central to that.”

Expounding on this further during the Q&A part of his address, Schroder said the “$3-million-dollar proposition” is “kind of logical”.

“Very high-income earners and very large account balances could be taxed differently, that’s kind of logical,” he said, but stressed his focus would be on lower-income earners.

“There is a group of people who earn between $39,000 and $45,000 who don’t enjoy the same tax concessions as the rest. And if I was going to be providing any guidance to the government, I’d be saying that’s the group that should be compensated more,” he said. “I’m not too stressed about the $3 million, but if we’re going to use energy and time, I’d be thinking about lower income earners rather than higher.”