Debby Blakey

HESTA added around $10 billion^[1] in savings and investment returns collectively to members’ accounts over the 2025/26 financial year, with the Fund’s MySuper investment option delivering strong returns through a period of heightened market volatility.

The $105 billion Fund’s MySuper Balanced Growth option, where most HESTA members are invested, delivered 9.46% for the financial year to 30 June 2026. The next largest investment option by funds managed, High Growth, returned 11.09%.

For members, this result has translated into real growth in their retirement savings. A HESTA member invested in MySuper Balanced Growth with an average starting balance of $80,000 will have likely received investment returns of around $7,568 in their account by the end of the financial year.^[2]

This year’s result represents the fourth straight year of annual returns above 9% for Balanced Growth. Over 10 years to 30 June 2026, the investment option has averaged an annual return of 8.29%, ranking in the top quartile over five and 10 years to 31 May 2026.^[3]

Demonstrating the power of compounding net investment returns over the long term, a HESTA MySuper Balanced Growth member starting with $40,000 10 years ago would have likely received around $48,719 in investment returns by 30 June 2026.^[4]

The strong 2025-26 financial year performance is also helping members in retirement preserve their savings as they draw an income stream, with HESTA’s Retirement Income Stream Balanced Growth achieving a return of 10.81% and Retirement Income Stream Conservative yielding 7.04%.

HESTA Chief Investment Officer Sonya Sawtell-Rickson said resilient global sharemarkets were a key driver of strong performance this year, with the portfolio well-positioned to navigate a volatile year in markets.

“Our considered, diversified approach helped us deliver a strong financial year result for our more than one million members amid a challenging geopolitical environment,” Ms Sawtell-Rickson said.

“We were able to manage risks in a volatile environment while also acting quickly on new opportunities that emerged as markets moved.

“With persistent inflation and ongoing geopolitical uncertainty likely in the year ahead, we’re staying focused on investments in areas where we see compelling long-term value, including healthcare, housing, climate solutions and artificial intelligence.”

The returns come as HESTA continues to focus on keeping costs competitive for members. In 2025 the Fund announced reduced investment fees across most of its Ready-Made options in the previous financial year. From 1 July 2026, HESTA reduced insurance fees by an average of 12% across all cover types as part of a broader suite of changes designed to provide more accessible and affordable insurance cover.

HESTA CEO Debby Blakey said the investment returns and fee reductions were great news for members, who continue to bear the brunt of high cost-of-living pressures.

“It’s fantastic HESTA has been able to continue to deliver strong long-term investment performance at a time of ongoing uncertainty in financial markets and as many of our members feel the squeeze from cost-of-living pressures,” Ms Blakey said.

“Delivering strong, long-term returns is fundamental to supporting our members into retirement, and outcomes like these can make a real difference to our members’ hard-earned savings for their financial future.”

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Debby Blakey

One year since super on Commonwealth Parental Leave Pay took effect alongside the super guarantee reaching 12%, HESTA modelling shows just how much these critical reforms can improve women’s retirement outcomes.

For a typical HESTA member who takes Commonwealth Paid Parental Leave^[i] the payment of super can make a meaningful difference at retirement. The Fund’s previous modelling, based on 18 weeks of leave, shows the payment of super potentially adds around $6,500 at retirement. For those who take leave for two children, that benefit increases to nearly $13,000.^[ii]

The first of these super contributions are imminent, with Australians who received Government-funded Parental Leave Pay during 2025–26 set to see this super arrive in their accounts from the Australian Taxation Office following the end of that financial year.

Further modelling^[iii] shows women^[iv] beginning their careers with the full 12% super guarantee in place for their entire working lives could retire with $712,000 – a potential $411,000 boost compared to women modelled to have retired in 2025.^[v]

HESTA CEO Debby Blakey said the one-year anniversary marked a genuine turning point for the Fund’s more than one million members, around 80% of whom are women, many working in typically lower-paid sectors including aged care and early childhood education.

“One year in and we’re starting to see the positive impact these important reforms are having – and will continue to have – on women’s retirement outcomes while making our super system fairer,” Ms Blakey said.

“Women have for too long retired with far less super than men, simply because the system didn’t account for the reality of their lives. These two reforms are starting to change that.”

HESTA had long advocated for the paid parental leave change, which addressed a structural gap that had seen Australian mothers miss out on well over $3 billion in super savings since the Commonwealth scheme was introduced in 2011.^[vi] Meanwhile the lift in the super guarantee is set to deliver compounding benefits over decades.

“This reform will see money flow into the super accounts of mothers who previously would have missed out simply for taking time to care for a new baby,” Ms Blakey said.

“The 12% guarantee means women starting work today could retire with more than double^{[ii, iv]} the amount of super compared to female workers who retired last year.”

Low-income earners are also set to benefit from upcoming Low-Income Superannuation Tax Offset (LISTO) reform, for which HESTA long advocated. From 1 July 2027, the maximum LISTO payment will increase from $500 to $810 and will be permanently linked to personal income tax thresholds, helping ensure low-income earners don’t pay more tax on their super than on their take-home pay.

Ms Blakey said it was important to keep the momentum going on positive super reform, as there was still much work to do to make Australia’s retirement system fairer. She said HESTA is supporting^[vii] research to design a workable model for superannuation ‘carer credits’. This reform is needed to ensure those whose workforce participation is impacted by the need to provide unpaid care can get a better deal in retirement.

“Super on paid parental leave, LISTO changes and the 12% super guarantee should be seen as the foundation for further progress, not the end. There are still policy settings that disadvantage women and those on lower wages, and HESTA will keep advocating to ensure the system works for everyone,” Ms Blakey said.

——–

Notes:
[i] Commonwealth Paid Parental Leave was up to 24 weeks in the 2025-26 financial year, extending to 26 weeks from 1 July 2026.
[ii] Modelling prepared by Laneway Analytics in 2024, commissioned by HESTA. This is a forecast and is predictive in nature and as such the outcome cannot be guaranteed and may be different. Key assumptions used in the modelling include a retirement age of 67; AWOTE 3%; CPI 3%; investment return rate (real) 3% (above CPI figures, net of investment fees and taxes); investment return rate (nominal) 6%; wage growth (HESTA derived per industry as at 1/3/22); 32 weeks spent away from workforce (per child); age of mother 30, 32 and 34 for child 1,2,3 respectively. The modelling scenario assumptions are for an average HESTA member per industry, and include assumptions around current super balance, recent super guarantee activity, voluntary contributions (pre- and post-tax) and insurance premiums. Estimates on retirement amounts are in today’s dollars.
[iii] Modelling prepared by Laneway Analytics in 2025, commissioned by HESTA. This is not a prediction, is for illustrative purposes only and as such the outcome cannot be guaranteed and may be different. The modelling made assumptions including: Begin career at age 18; Retirement age 67; AWOTE: 3.7% pa; CPI 3.7% pa; Investment return net of investment fees and taxes CPI +3% pa; 18-year-old HESTA member account balance $1500; 18-year old HESTA member total contribution $1543 for first year of work, then contributions made annually thereafter based on HESTA’s assumptions around salary progression; Default insurance cover (premiums CPI-adjusted); Accumulation fixed fee $52 pa (non-indexed); Accumulation variable fee 0.15% pa (non-indexed); Full-time work at ages 18 to 30, 44 to 67; 26 weeks of super on Paid Parental Leave at ages 31 and 33; Part-time work (0.6 FTE) at ages 34 to 43; No other retirement savings.
[iv] Women representative of the average HESTA member.
[v] Compared to the Estimated Retirement Amount ($301k) for a typical HESTA member who started their career on 1 July 1976 and will retire on 30 June 2025, earning 3% super starting 1992 and taking account of historical super guarantee increases. Estimated Retirement Amount for a typical HESTA member who started their career on 1 July 2025 and will retire on 30 June 2074, earning 12% super is forecast to be $712k.
[vi] Modelling by Laneway Analytics (dated February 2024) estimated the benefit to Australian women as of 31 December 2023 ($3.3 billion) if superannuation had been paid as part of the Commonwealth Parental Leave Pay scheme since it was introduced on 1 January 2011.
[vii]With other profit-to-member funds, coordinated by Women In Super.

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Debby Blakey

Key points

Notes:
[1] Based on a survey of 437 HESTA members conducted in May 2026.
^[2] Based on HESTA data averages in June, compared to average of remainder of FY. For financial years 2023-25.

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Debby Blakey

HESTA has announced an average 12% drop in insurance fees across all cover types^[1] will take effect later this year as part of a broader suite of changes designed to provide more accessible and affordable insurance cover.

From 1 July 2026, HESTA members^[2] will pay less for the same level of death, total and permanent disablement (TPD) and income protection cover, and benefit from strengthened protection during pregnancy. The Fund has also improved the insurance fee waiver during parental leave, and made it faster and easier for members to apply for insurance cover.

The changes mean insured HESTA members will see average fee decreases of around 6% for death cover and nearly 15% for TPD, with income protection average reductions ranging from 1.4% to 23.5% depending on benefit period,^[3] which can mean more money stays invested in members’ super.

More than 630,000 HESTA members have insurance cover through their super. Over 80% of these insured members have standard default cover.^[4]

HESTA CEO Debby Blakey said the changes, which follow HESTA’s renewal of its long-standing insurance partnership with AIA Australia^[5], reflect the Fund’s commitment to providing members with value-for-money insurance.

“Being able to keep insurance costs down and enhance protections is a fantastic outcome for our members who are feeling the impact of higher cost-of-living pressures,” Ms Blakey said.

“Around 80% of HESTA members are women, many working in health and community services, dedicating themselves to looking after others. Providing access to appropriate, affordable insurance cover is a critical offering that can give our members and their families real peace of mind at a time when it matters most.”

As well as reduced insurance fees, the July changes mean HESTA members on parental leave will be able to maintain their cover without paying insurance fees for a full 12 months, with this extending to 24 months for a member whose baby is born prematurely.

The Fund is also removing the automatic exclusion of disabilities related to normal pregnancy or childbirth or miscarriage, from income protection claims in specified circumstances. This is currently a common industry exclusion.

The July changes build on the November 2025 uplifts made in partnership with AIA Australia to improve the digital insurance claims experience for HESTA members.

“For many of our members, the cover they have within their super is likely to be the only personal insurance they hold, which makes getting our insurance offering right all the more important,” Ms Blakey said.

“These changes reflect our ongoing commitment to provide insurance cover that is affordable, accessible, and that genuinely works for members when they need it most.”

Members will receive communication about the changes later this month, with the updated PDS and Insurance options guide available on the HESTA website from 1 July 2026.

Key insurance and other changes taking effect from 1 July 2026^[6] include:

• Reduced insurance fees: all insured HESTA members will get an insurance fee reduction for death, total and permanent disablement and income protection cover. The fee reduction amount will vary for each member and depend on a range of factors.^[7]
• Extended parental leave insurance waiver: while on parental leave, insurance cover can continue without fees for a full 12 months. For premature births (before 37 weeks) this will be extended to 24 months.
• Pregnancy-related disability changes: the automatic exclusion from income protection claims of disabilities related to normal pregnancy or childbirth, or miscarriage, will no longer apply in specified circumstances.
• Non-lapsing binding death benefit nominations: HESTA members will be able to make non-lapsing binding death benefit nominations from 1 July 2026.
• The minimum new events cover timeframe is reducing: new events cover will generally apply until 10 consecutive days of active employment, down from 30 days.
• Easier to apply for cover: members will be able to apply for increased death (up to a total of 6 units) and income protection (up to a total of 12 units) cover at any time by completing a short personal health statement.

———–

Notes:
[1] Average reduction in HESTA insurance fees across all cover types, effective 1 July 2026. The fee reduction amount will vary for each member and will depend on a range of factors including, but not limited to, the type and amount of cover, age and benefit period. More information about how insurance fees are calculated can found in the Insurance options guide on the HESTA website.
[2] HESTA Super and HESTA Personal Super members. The insurance changes will not apply to HESTA Corporate Super members.
[3] Average income protection fee decrease, effective 1 July 2026, with a benefit period of: up to 2 years: 1.40%; up to 5 years: 13%; up to age 60/67: 23.50%.
[4] As at 31 March 2026. Default cover consists of two units of income protection cover and two units of death cover. For more information, read the Insurance options guide on the HESTA website.
[5] HESTA reduces insurance fees and strengthens protection for members
[6] Insurance changes are only applicable to HESTA Super and HESTA Personal Super members.
[7] Factors include, but are not limited to, the type and amount of cover, age and benefit period. More information about how insurance fees are calculated can found in the Insurance options guide on the HESTA website.

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Ms Misic will be responsible for leading the ‘top down’ aspects of the portfolio, which includes portfolio construction and risk analysis, economic and capital market research, and portfolio overlays. The role reports directly to HESTA Chief Investment Officer, Sonya Sawtell-Rickson.

Ms Misic joins HESTA from the $29 billion Telstra Super, where she has been Acting Chief Investment Officer since March 2025. She is also Head of Alternative Investments and Real Assets at Telstra Super, a role she has held since December 2022.

HESTA CEO Debby Blakey said the appointment would further strengthen leadership and expertise within the Fund’s investment team.

“We’re excited to welcome Kate to HESTA, who brings a strong track record in investments. This is a critical role within our investment team and we’re confident Kate’s expertise will help us continue to deliver the strong long-term returns our members deserve,” Ms Blakey said.

Ms Sawtell-Rickson added Ms Misic’s experience would support HESTA’s efforts to capitalise on long-term opportunities for members in a fast-changing environment.

“Kate has broad and deep experience navigating a range of market conditions and asset classes, including internal management, which will be invaluable for HESTA as we continue to leverage our total portfolio approach,” she said.

“Her deep knowledge and trusted leadership will be invaluable as we continue to evolve, internalise and strengthen our investment strategy for the benefit of our members.”

Ms Misic said she was excited to join the Fund and support its clear sense of purpose.

“I’m thrilled to be joining HESTA. I look forward to contributing to an investment strategy that delivers real impact for members, many of whom have dedicated their careers to caring for others,” Ms Misic said.

Before joining Telstra Super, Ms Misic held roles at Warakirri Asset Management, Frontier Investment Consulting and Wilshire Australia.

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Robbie Campo

The HESTA Board has announced the appointment of Robbie Campo as CEO of the $100 billion profit-to-members industry fund, effective August 2026^[1].

HESTA Chair Nicola Roxon congratulated Ms Campo on the appointment, saying her wide-ranging leadership experience across a 26-year career in the superannuation sector made her a standout choice and would position her well to lead HESTA through its next, significant strategic era.

“Robbie brings extensive experience across executive and CEO roles, leading organisations, big and small, through complex regulatory, operational and investment environments to deliver better outcomes for members,” Ms Roxon says.

“As HESTA grows beyond more than one million members and $100 billion in assets, Robbie’s skills will position her well to lead the Fund as it enters an exciting new chapter – striving always to help our members feel confident, connected and well prepared for the future.

“Alongside our shared commitment to improving the financial futures of working people, particularly women, Robbie’s an inspiring leader who will bring fresh eyes and new energy to amplifying the positive impact HESTA has for generations of our members.”

The appointment follows a thorough search and interview process with a highly competitive field of applicants.

Currently the CEO of ESSSuper, Ms Campo’s previous leadership roles include Group Executive of Brand, Engagement, Advocacy and Product at CBUS and Deputy Chief Executive of Industry Super Australia (ISA). She is Chair of Women in Super, and has served as a non-executive director of Victoria Legal Aid and as a Director at Industry Fund Services. Ms Campo holds a Bachelor of Law with Honours, a Bachelor of Arts and a Graduate Diploma in Applied Finance and Investment.

Ms Campo said she felt privileged to be chosen to lead an organisation that is so strongly committed to improving the financial future of its members, 80% of whom are women and predominately work in health and community services.

“I am thrilled to be appointed as HESTA’s CEO, a role which will allow me to continue my passion for improving the economic security of Australians and, in particular, improving retirement outcomes for women,” Ms Campo said.

“HESTA is a top performing fund^[2] with a proud history of constant and courageous advocacy, global leadership in responsible investment and a strong track record of supporting its members. The nurses, carers, educators, and community service workers that make up the Fund contribute so much to the community, and it will be an honour to help them achieve a more secure retirement.”

“I look forward to building on the Fund’s very strong foundations, and to receiving the baton from such a high-impact leader as Debby.”

Ms Campo will start as CEO in August ensuring a smooth transition from current CEO Debby Blakey.

Ms Blakey welcomed the Board’s decision to appoint Ms Campo.

“I’ve had the opportunity of working with Robbie over many years on improving the super system for women and working Australians. I am thrilled I will have the privilege of handing over to Robbie as the incoming CEO in August, and feel confident she will lead the Fund from strength to strength,” Ms Blakey said.

———

Notes:
[1] The appointment is subject to standard regulatory approvals, including fit and proper assessments and notification as required under the Financial Accountability Regime (FAR)
[2] Based on HESTA’s analysis of SuperRatings 10 Year Platinum Performance 2016-2026
(MySuper).

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Debby Blakey

Around one year after the market shock caused by US tariff announcements, HESTA is urging its more than one million members to stay focused on their long-term retirement goals as global markets experience heightened volatility in response to escalating Middle East tensions.

Following the start of the Iran conflict, the super fund has seen a rise in average daily investment switching activity in March from the previous month^[1] while the number of visits to HESTA’s investment pages has risen sharply.

Switching activity peaked on March 9 when oil prices jumped through US$110 per barrel and the ASX200 fell 2.8% in its worst day since US trade tariffs were announced in April 2025. Daily switching numbers have since eased but remain above typical levels.^[2] Members who have switched investments options have predominantly moved their retirement savings into very defensive options, such as Cash and Term Deposits.

Amid the more challenging market conditions, the number of visits to HESTA’s investment landing page via online accounts climbed nearly 37% in March 2026.^[3] HESTA is providing regular updates to members on its website based on the current situation.

HESTA CEO Debby Blakey said it was natural to feel concerned during periods of market uncertainty, however making snap decisions based on short-term market fluctuations could harm retirement outcomes in the long run.

“We understand news of the conflict in Iran and the impact on global markets can feel unsettling, but history shows staying invested through market ups and downs typically delivers stronger long-term returns for our members,” Ms Blakey said.

“Super is a long-term investment. While it’s important to stay informed, knee-jerk reactions to short-term market movements can crystallise losses and risk missing out on a market bounce back. This could potentially cost tens of thousands of dollars at retirement.

“The best thing to do if you’re feeling anxious about your super is to seek advice tailored to your individual circumstances, which also takes account of how close you are – or if you are in – retirement. Engaging with your super regularly, not just during periods of market volatility, can also help build confidence in your investment strategy and ability to stay the course.”

A HESTA member survey conducted in September 2025 found 43% would be more likely to monitor their super balance during volatile market periods.^[4]

Separately, the Fund’s analysis of historical data revealed the potential risks of switching to more conservative options during a correction.

If a member with a $100,000 balance switched from the most popular option, the default MySuper Balanced Growth, to the most defensive Cash & Term Deposits option during COVID in 2020, just five years later they could be more than $20,000 worse off in terms of potential retirement savings. This figure assumes they took one year to switch back.^[5][6]

Ms Blakey said the team began the year with a cautious outlook, noting the Fund’s well-diversified portfolio was built for resilience during periods of market volatility.

“We actively manage members’ savings and our well-diversified core portfolio is built to weather periods of significant volatility,” Ms Blakey said.

“Our highly experienced and skilled investment team is closely monitoring developments and updating scenario planning to help ensure our ongoing activities manage emerging risks and take advantage of new opportunities.”

HESTA’s Balanced Growth investment option, the Fund’s MySuper default super option and where most HESTA members are invested, has delivered strong returns over the short and long term. It has returned 7.77% over the past year and an average of 7.89% per annum over the past 10 years, both to 31 March 2026.

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Debby Blakey

HESTA has launched a new white paper that highlights a significant blind spot in Australia’s retirement system.

The white paper – Make the move: guiding members to tax-free retirement – is a continuation of research insights released last month, providing further insight on how eligible Australians are missing out on billions of dollars in tax-free retirement savings.

It reveals for the first time that, collectively, eligible Australians likely missed out on up to $13.5 billion in tax-free investment returns between 2017 and 2025 simply by not transitioning their super into the retirement phase when they became eligible.

The white paper points to a simple solution: to let funds act in their members’ best interests at retirement by proactively transitioning eligible members into the tax-free phase of superannuation with the ability for members to opt out.

The research^[1], commissioned by HESTA and conducted by Laneway Analytics, analysed diverse eligible groups of members and found that every member group is expected to benefit from transitioning to a retirement product when they become eligible – regardless of their balance, gender, homeownership status, or whether they have a partner.

Current retirement product take-up rates by eligible members are low – 30% at HESTA and 45% system wide. This is despite member education efforts and targeted communications within the limitations of the current advice settings. The solution put forward could deliver Australians up to 12% more money in retirement compared to those who delay transition by four years.

“Retirement should be a time when Australians can enjoy the rewards of a lifetime of work. Yet too many Australians are not making the move from saving for retirement to actually living in retirement – and the cost of that inaction is significant,” HESTA CEO Debby Blakey said.

“Without reform, the problem will only grow. We need system-level change to make it easier for people to access tax-free income in retirement.”

The research found that in FY2025 alone, 1.8 million Australians remained in accumulation phase despite being eligible to switch, collectively forgoing $2.5 billion in a single year. By 2030, nearly 3 million Australians are projected to be missing out on $5.5 billion annually.

HESTA is continuing to call for reform, advocating for a default with member opt-out, that would transition eligible members to retirement phase products at a certain age when they’re no longer making contributions.

The white paper highlights how women disproportionately carry the cost of not transitioning to a retirement phase option – being the least likely to act under the current voluntary model. Female HESTA members have a take-up rate of just 29%.

“Women who have spent their careers caring for others often retire with more modest balances – and they are precisely the members least likely to make this transition on their own,” Ms Blakey said.

The research suggests transitioning to a retirement income stream upon eligibility could boost a member’s total retirement income by up to 12% depending on their circumstances, compared to those who delay by four years. This figure aligns with the median duration HESTA members remain eligible but do not transition. Such delays cost retirees both in the near-term and in the years ahead as the impact compounds over time.

“The research finds every eligible member cohort analysed is better off when they have access to a retirement phase option rather than staying in accumulation,” Ms Blakey said.

“That’s why we’re calling for a well-designed default mechanism that would seek to ensure no Australian is left behind simply because the system failed to guide them.”

HESTA’s white paper Make the move: guiding members to tax-free retirement was discussed at a roundtable event in Melbourne last week by sector leaders from funds, industry bodies, institutes and think tanks.

Read the paper.

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Debby Blakey

“HESTA welcomes the passage of the Division 296 Super Bill as a significant step toward a fairer superannuation system for all Australians.

“We are particularly excited to see the benefits of the Low-Income Superannuation Tax Offset (LISTO) – a reform HESTA has championed for several years. It represents a clear win for more than a million Australians who have been impacted by an inequality in the system, particularly women working in the lower-paid caring professions that are the backbone of our communities.

“The LISTO is effectively the only tax break more likely to benefit women than men. Today, we celebrate the recognition that this policy must work as it was always intended – for the long-term benefit of those who need it most.

“This includes the critical decision to permanently link the payment to personal income tax thresholds. The commonsense reform should ensure no Australian will pay more tax on their super than on their take-home pay.

“Around 70,000 HESTA members will directly benefit, having previously missed out on millions in super contribution ‘refunds’ under the old policy settings. For many, this change could have a transformative impact with the potential for tens of thousands of dollars more at retirement.

“The passage of this Bill, alongside major reforms such as super on Paid Parental Leave, the increase in the super guarantee to 12%, and the ‘3 Day Guarantee’ child care subsidy, represents a defining shift in how Australia supports women’s financial futures. Together, the changes can deliver meaningful progress in closing the persistent gender super gap.”

By Debby Blakey, CEO

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Debby Blakey

Australian retirees are missing out on billions in retirement benefits by not transitioning their superannuation to retirement phase, where they could benefit from tax-free investment earnings, new research reveals.

The research from Laneway Analytics, commissioned by HESTA, shows that in the 2025 financial year up to 1.8 million Australians collectively, and often unknowingly, missed out on an estimated $2.46 billion in additional investment earnings.

Without reform, this figure is projected to rise to more than $5 billion annually by 2030, impacting an estimated 2.9 million Australians.

In its 2026-27 Pre-Budget Submission, HESTA is calling for a range of regulatory changes to modernise the super system to ensure it better caters for the changing nature of retirement. This includes giving funds the ability to actively prompt members to transition to appropriate specific fund retirement products, with the ability to opt-out.

HESTA CEO Debby Blakey said the research clearly highlighted the value in reform.

“Australian retirees could be eligible for billions of dollars in additional retirement savings by simply moving their super to a tax-free retirement product,” Ms Blakey said.

“We’re calling for changes that would allow super funds to actively help eligible members transition to retirement products. This simple change could make a profound difference to Australians’ retirement outcomes.

“This isn’t just about individual retirees – it’s about Australia’s future. By enabling retirees to maximise their retirement income, we’re supporting we’re supporting more dignified retirements and helping to boost the economy.”

The change advocated for by HESTA includes implementing ‘soft defaults’ that would automatically transition eligible members to retirement phase products at a certain age when they’re no longer making contributions. The proposal would maintain clear member opt-out options.

The research modelling[1] shows that transitioning to retirement phase products could boost a member’s total retirement income by up to 12%, or as much as $99,000, compared to those who delay transitioning by four years.

The most profound benefit would be seen by members with lower balances, between $44,000 and $396,000, including women who may have worked part time or had breaks in their careers, who are often affected by the persistent gender super gap which has often been exacerbated by current super settings.

The benefits extend beyond individual retirees to the broader economy. As Australia’s population ages, enabling retirees to maximise their retirement income could help fuel the growing ‘silver economy’ while reducing pressure on the Age Pension system.

“The ‘silver economy’ represents a significant economic opportunity for Australia. By enabling retirees to maximise their retirement income, we are not just supporting more dignified retirements, we are enabling active participation in the economy through increased spending power,” Ms Blakey added.

“If we don’t act, by 2030 we could be talking about a missed opportunity worth up to $5 billion a year for Australian retirees and the economy.”

The modelling also found:

• Only 45 per cent of eligible Australians with super accounts transition voluntarily to a tax-free retirement account at Preservation Age.
• Australians aged over 65 missed out on $13.5 billion in retirement savings between2017 and 2025.

HESTA’s 2026-27 Pre-Budget Submission outlines additional priorities to modernise the retirement system, including:

• Allowing members to top up their retirement income streams with employment income.
• Removing barriers for pensioners to work more while keeping more of what they earn.
• Introducing measures to make the system fairer for women and carers.

For several years HESTA has called for an update to the Low-Income Superannuation Tax Offset (LISTO) and last week welcomed the introduction to parliament of legislation that will increase the full LISTO payment from $500 to $810, and permanently pin LISTO eligibility to income tax thresholds. This pinning is critical to ensure those who LISTO is intended to support continue to receive this payment over the long-term.More than 70,000 HESTA members are expected to directly benefit from the reform.

———

Notes:
[1] The Laneway Analytics modelling is based on assumptions including investment returns and the drawdown rate from income streams.

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