In our ongoing series on the Retirement Income Covenant, we've already discussed the critical role of setting up the right Governance models. Today, let's delve into Data and its pivotal role in shaping effective retirement income strategies.
From the July 2024 Pulse Check, one of the key challenges to covenant implementation identified by funds was the lack of access to data about their members, but the regulators have been quite clear in saying that they are not asking funds to move mountains, but rather maximise the value of the data they already have. In this respect, there is so much that can be done now.
Why is Data so crucial?
- As the covenant instructs us, segmenting members allows us to tailor strategies to the needs of members that fall within certain cohorts rather than having a one-size-fits-all approach.
- Although we have been seeing a lot of consolidation in the industry, the reality is that every fund has different demographics, and each will have different needs now and in the future. The new changes to SPS 515 encourage funds to perform membership projections, with a view to understanding demographic change and what that means for member needs.
- Capturing data about members' activity, for example calculator usage, helps funds monitor changes over time to predict future needs and adjust strategies proactively – such as marketing campaigns.
- Existing industry benchmarks can be used to measure performance against peers and identify areas for improvement.
By focusing on data, you can ensure that your retirement income strategies are not only well-informed but also precisely targeted and updated to deliver the best possible outcomes for your members.
Stay tuned for our next post where we'll explore Engagement and how it drives success in the context of the Retirement Income Covenant.
I'll see you at the The Australian Financial Review Super & Wealth Summit to discuss the above and more.