Cyber security and lifetime income products emerge as critical tests for super funds
Ian Fryer
Cyber security and the ability of a super fund to deliver reliable lifetime income for those in decumulation phase are emerging as the two key tests of whether funds are fit for purpose for Australians planning their retirement, says Ian Fryer, general manager with Chant West.
He says cyber risk is no longer just an IT or compliance issue but a core component of retirement service delivery.
“As the balances of Australian super accounts are growing, they are increasingly becoming attractive targets for cyber criminals. Fraud risks can arise during pension commencement, rollovers, withdrawals or account changes, meaning funds must demonstrate strong cyber protection for their members.”
It is for this reason that cyber security has been added to the Epic Retirement Tick criteria, Australia’s first consumer-facing benchmark assessing a super fund’s retirement-readiness for its retiree and pre-retiree members.
“To achieve the Tick, super funds need to demonstrate that they are cyber secure, and that they receive external certification of cyber security measures, at least every two years,” Fryer says.
“They need to demonstrate secure online ID for digital identity verification. They also need to meet multifactor identification requirements to login and also for a range of other high risk activities, such as ad hoc withdrawals, changing payment details, and also if there’s a change to the power of attorney.
“The focus on cyber is a growing risk, and once you’re drawing down your money, you are absolutely a target.”
Fryer says the other important issue for retirees that super funds are grappling with is the development of lifetime income products for those entering the draw-down/retirement phase.
“We need to see super funds not just offering products designed to deliver income for life (including annuities, pooled longevity solutions or hybrid retirement income structures), but also educating members about the solution and explaining when they are appropriate,” Fryer says.
“The industry is still in the early stages of developing scalable lifetime income solutions, and there is more work to be done. Many funds are grappling with product complexity, regulatory settings and low member awareness of longevity protection products.
“Currently, it’s very hard for a consumer to compare one product against another. Yes, you can look at performance, you can look at fees, but how do you compare the services they provide? When you get to retirement, those services are just as important, maybe even more important, than fund performance.
“It’s not good enough for a super fund to just to have a product. It is also important to have the education, guidance and advice about these products. If professional financial advice is needed, we don’t want it to cost members $5000. We want it to cost $1500.
“What we are looking for is education or advice that helps members specifically on whether to and then how to use a lifetime product.”
Fryer says those approaching retirement are still hesitant to adopt lifetime products because the decisions can be difficult to reverse and require a level of guidance or advice many members do not currently receive.
“With more Australians entering retirement with larger super balances than previous generations, the pressure on funds is to deliver both secure systems and sustainable income.”
Chant West and the Epic Retirement Institute launched the Epic Retirement Tick assessment for super funds in 2025. It is a retirement-readiness framework, developed in a partnership with Chant West and the Epic Retirement Institute, that offers a consumer-focussed assessment against 20 key criteria. They are measures of a fund’s retirement readiness including investment options tailored to the pension phase, retirement income products, drawdown guidance, advice pathways, calculators and modelling tools, education and engagement strategies, and service delivery measures such as pension payment timeliness and call centre performance.
It establishes a benchmark for best practice for super funds’ retirement offering. Funds must satisfy at least 14 out of the 20 criteria, with successful funds earning the ‘Epic Retirement Tick – powered by Chant West’.
