“While Australia is a world leader in accumulation it’s significantly behind the curve on decumulation.” So says Guy Opperman, an energetic man of many talents. His CV includes stints as a steeplechase jockey, a barrister, and a pro-bono advocate for prisoners on death row in the Caribbean. But it was during his years as the UK Minister for Pensions and Financial Inclusion, serving five different Prime Ministers (David Cameron, Theresa May, Boris Johnston, Liz Truss and Rishi Sunak), that he was able to make his greatest public contribution.
This role, which he clearly relished, came to a crashing halt in late 2022 when he was sacked by then PM, Liz Truss. But in a few short weeks (famously measured by the livestream of an iceberg lettuce) there was a new PM, Rishi Sunak, who invited Guy back to get previously planned legislation through the Commons.
What can Australian super funds learn from the UK?
A lot. During his time at the helm of the Department for Work and Pensions (DWP) Guy steered two landmark initiatives which changed the face of retirement income planning for millions of Britons.
The UK pension system is very different from the Australian super and entitlements system, but millions of savers in both nations share a fundamental similarity. As these pre-retirees enter their 50s, their primary need is to maximise their lifetime savings to provide for themselves to last a further 30 or so years in retirement. But before they can hope to improve their individual financial outcomes, first they need to understand the rules of the system. Most don’t. Put simply, individual pre-retirees in both nations are often so overwhelmed by the complexity of their options that they respond with total disengagement.
What Guy learned
While the former Minister was responsible for many initiatives and hundreds of pages of legislation, there are two public engagement policies which stand out: the ‘Wake Up Packs’ and the ‘Mid-life MOT nudge’.
According to Guy, the Wake Up Packs were designed to jolt Britons into action when it came to managing their retirement savings. A creation of Treasury and the Financial Conduct Authority (FCA), they required mandatory reminders to be issued to members by private pension providers. The packs have been regularly reviewed and improved since 2015, most recently, says Guy, with the directive “to be simple and stark, no flowery language. In a maximum of two pages to cover the short message that you are going to be retired a long time - how will you pay for this?”
Following the distribution of Wake Up Packs, Guy then developed the Mid-life MOT nudge. The MOT refers to a Ministry of Transport auto check which Australians call a ‘roadworthy’. In this case, it became a ‘retireworthy’, which Guy claims addressed evidence that the key time to talk to people about their wealth, work and wellbeing is 47 years of age - i.e. between 45-50 - the mid-life. This nudge is a much bigger proposition than the Wake Up Pack and is provided by employers, pension providers and government. It helps savers to take stock of their finances, skills and health, and enables them to better prepare for their retirement and enhance their financial resilience. The expanded Mid-life MOTs are now delivered online, in the private sector and through the DWP’s national network of job centres.
Both programs also push consumers to government support in the form of the MoneyHelper and Pension Wise websites.
MoneyHelper is an independent government-funded information site with tools and calculators for all ages. Pension Wise is also free and impartial, providing tailored guidance to people aged 50 or over with a defined contribution pension. It helps individuals understand their options for accessing pension pots, including tax implications and spotting scams, via phone, face-to-face, or digital. Services are also available via telephone and face-to-face appointments.
Should these initiatives be replicated in Australia?
Yes, says Guy, as a way of solving our poor performance when it comes to decumulation. He also wonders if Australian super funds are so consumed with retention, that they can’t see the wood for the trees. And if, ironically, in overlooking the opportunity for Wake Up packs or Mid-life nudges, members are less engaged, and so perhaps even more likely to move to another fund or platform as soon as they reach their preservation age.
We see independent corroboration of the flaws that Guy believes need fixing in the recent Conexus Institute State of Super report (2026) which measured increasing asset outflows from nearly all profit-for-member and commercially operated master trusts to super fund platforms which are used by financial advisers. This is no doubt fuelling the sector’s concentration on retention - arguably at the expense of member education.
Separately, according to the same report, the proportion of fund assets in or approaching retirement (proxied by members aged 55+) is huge for nearly all funds.
As Connexus Executive Director, David Bell, notes, “This calls out the fiduciary need to assist members to utilise those assets effectively and also the business risk to funds of not developing well-considered retirement strategies.”
And then there is the downward trend in performance of the Australian retirement system in Mercer’s Global rankings from 5th (2023) to 6th (2024) to 7th last year, partly attributed to the way we (fail to) support members when they move from saving to spending.
Guy believes that funds are failing the very basic need to have a decumulation strategy. And that three policy interventions are urgently needed:
- A proper decumulation test by the regulator
- Scrutiny on the fund’s decumulation actions
- If no viable decumulation strategy exists, then the fund would lose its accumulation licence.
He also suggests that far earlier interventions from an industry-government backed organisation is imperative.
“65-67 is way too late to talk. Implementation is needed much earlier – as with the Wake Up Packs in the UK at 50, 55, 60 and 65. A levy or grant would allow an independent government-backed organisation to provide free support along the lines of Pension Wise and MoneyHelper, including guidance and advice and early-stage intervention to encourage proper decumulation implementation.
This early intervention with independent assistance would ask:
- What have you got?
- What is your plan?
This would complement further development of specific products (that people can understand!) to support their long-term investment strategy – some form of Lifetime Income Streams or annuities – but with much better educational support on their features and benefits.
Perhaps Australian funds are tackling this challenge back to front. They are so preoccupied with the concept of ‘retention’ that they are ignoring the need to introduce guidance and support that could well lead to stronger retention.”
Is this the answer?
It’s foolish to think that we hold all the answers to improving our own income system for everyday retirees. An experienced and objective eye suggesting it’s time for us all to wake up is refreshing.
Despite the Howard Government’s launch of a national financial literacy program in the early 2000s, there has been little to no progress in helping middle income Australians to understand their retirement options as they move from saving to spending.
Successive federal governments haven’t wished to own this urgent need so very little has happened.
To be fair, from time-to-time Treasurers have thrown a few dollars at the Moneysmart website. But they simply hope retirees will stumble over a slightly improved calculator that shares some of the maths, but little specific information and guidance.
This hasn’t moved the needle at all.
Governments actually need to go out and find those who are saving for retirement and that’s exactly what the Wake Up Pack and Mid-life MOT nudges do well.
Neither of these programs are perfect – from the reviews it’s easy to see that they are still a work in progress. But those who work in the retirement income system realise there are no silver bullets, rather a need for a suite of programs to encourage 50-somethings to make the most of their money.
Guy Opperman is right to criticise our poor decumulation performance. The uptick in decumulation is not surprising. Nor is it surprising that 250,000 Australian boomers are retiring every year – that’s basic demographics and Australian government should have planned for this since boomers were born post-WW2.
Yet our financial regulators do seem to have been caught by surprise.
This is unforgivable.
We desperately need to create a stronger connection between retirement savers, funds, guidance, advice and support.
Now!
And, as Guy suggests, to introduce penalties for funds that fail to do so. He says he’d love the chance to help Australian super funds to work on their retirement strategy, incorporating Wake Up packs, a Mid Life assessment and other nudges to measurably improve member outcomes and help ensure that the fund retains the member.
But it’s not all on the funds. They should not have to individually recreate their own separate ‘wheels’. This is the responsibility of the federal government; to create a standard retirement activation template to get the connections going. Refining the Wake-Up Pack and Mid-life nudge sounds like a good place to start.
Kaye Fallick is an independent retirement commentator and author, www.kayefallick.com. This article is general information and does not consider the circumstances of any person.