Super system falling short on pension phase

The superannuation system has been very successful in building wealth for retirement, but is still struggling to help fund members shift their balances into income during their post-work years, according to a major accounting body.

CPA Australia superannuation lead Richard Webb said the growth of the nation’s retirement savings pool to around $4.5 trillion was impressive, but the system fell down when people entered retirement phase and super funds were part of that problem.

“For all the success of Australia’s superannuation system in building one of the world’s largest pools of retirement savings, the industry continues to struggle with the most important transition of all: paying members an income when they retire,” Webb said.

“The uncomfortable reality is that super funds have become very good at collecting contributions and growing balances, but far less effective at helping retirees convert those balances into sustainable income streams that they feel comfortable spending.”

He pointed out the most recent update on the implementation of the Retirement Income Covenant, released by the Australian Prudential Regulation Authority and Australian Securities and Investments Commission in November 2025, found a lack of consistency in how retirees are supported and no agreed best-practice approach to retirement income products, strategies or large-scale advice delivery.

This meant many retirees were dealing with complex choices around account-based pensions, longevity risks and drawdown rates without any assistance, and providing help with the transition from accumulation to pension phase should be a key priority for policymakers, regulators and super funds, he said.

“We’ve spent decades building one of the world’s most successful retirement savings systems. The next challenge is ensuring that entering a secure and dignified retirement is as simple and effective as the process of saving for it,” he stated.

“Australians should not have to navigate a complex maze of products, rules and decisions just to access an income from the savings they’ve spent a lifetime building. The system must do more to help retirees convert their balances into secure, sustainable retirement income.

“This is not just a superannuation issue. It’s an economic issue. There’s a risk that trillions of dollars remain locked away in retirement savings simply because the onus is on retirees to switch their retirement income on.

“If Australians are overwhelmed with paperwork when attempting to draw down their super, our economy misses out on spending, investment and productive growth.”