(Bloomberg) -- Australia’s A$3.9 trillion ($2.6 trillion) pension sector should do more to prepare for the coming wave of retirees by enhancing efforts to track and improve results for members, industry watchdogs said.

With three million people set to retire in the coming decade, a survey by the Australian Securities and Investments Commission and the Australian Prudential Regulation Authority found only “incremental progress” has been made by funds in helping members prepare for leaving the workforce. About A$426 billion in pension savings are held in retirement products.

Rules introduced for Australia’s pensions industry in 2022 — known as the Retirement Income Covenant — require funds to develop a retirement income strategy for members and help those in or approaching retirement to understand what products are available and how they can spend their savings.

“The most concerning finding from this survey is the lack of progress being made by trustees in tracking the success of their strategies, especially as this was highlighted as one of the key areas in need of improvement in the thematic review report,” APRA Deputy Chair Margaret Cole said in a statement.

Australia’s pensions system is the fastest-growing retirement savings pool in the world and has received praise from peers in the US and the UK. The industry receives inflows of about A$2 billion per week from compulsory contributions, which rose to the equivalent of 11.5% of workers’ salaries on Monday. Still, Australians are anxious about having enough money in retirement and the sector is grappling with how to best prepare people to transition to leaving the workforce.  

Funds told the regulators they faced several challenges, including uncertainty around providing financial advice, privacy, security and costs concerns about collecting more member data, the regulators said. They also cited a lack of member engagement.

The Association of Superannuation Funds of Australia, the peak body for the industry, said funds have made “substantial investments” to provide members with information about retirement.

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