TTR #3: Super switching “red flags” are on the table

Welcome to TRR #3 (2026). Three developments on our radar in this edition: Treasury’s MIS reform (with a proposed rollover alert layer), Allianz Retire+ makes AGILE simpler and cheaper, and the retirement-budget adequacy benchmark problem. Let’s dive in.

Treasury’s MIS consultation floats a new obligation for trustees to flag suspicious rollover patterns before members are harmed.

The Minister for Financial Services, Dr. Daniel Mulino, has announced a consultation on ‘enhancing oversight and governance of Managed Investment Schemes’.

Treasury notes that (as at June 2025) there were 3,587 registered MISs holding more than $2 trillion in FUM, with unregistered schemes adding ~another $1 trillion.

This is the first consultation since Dr. Mulino signalled a push to strengthen consumer protection and financial stability in the wake of the Shield and First Guardian Master Fund failures (2025).

Reforms are proposed across six areas: compliance plans, board governance, related-party transactions, capital/resource requirements, ASIC data powers, and super switching alerts.

Proposal 6 (super switching alerts)

Treasury is effectively exploring an “intelligence layer” alongside existing trustee reporting (e.g., the Reportable Situations Regime). The paper notes trustees can already report certain matters, but there’s no explicit requirement to report pattern-based signals that may indicate third-party misconduct.

Examples Treasury flags as potentially useful indicators include unusual spikes in:

Treasury has posed five questions on Proposal 6. Submissions on any of the proposals close 27 February.

Allianz Retire+, the Australian life insurance arm of the global Allianz Group, recently announced a number of changes to its Allianz Guaranteed Income for Life (AGILE) product.

Under a PDS roll dated 19 January 2026, AGILE:

For members electing the Age Pension+ Option, the 1.15% p.a. Lifetime Income Premium will no longer be charged from the later of: commencing Lifetime Income and meeting a relevant condition of release (super) or reaching Age Pension age (non-super money).

Other fee arrangements (including Adviser Service Fees) appear unchanged.

Allianz also reported a 50% increase in AGILE sales since September 2025, citing “the growing momentum in the retirement income market.”

AGILE is another product built to meet SIS Reg 1.06A criteria for ‘innovative retirement income streams’ (IRIS), and it continues the pattern we noted last edition with AMP’s Lifetime Boost: advisers are finding use-cases, particularly for mid-to-high balance households navigating the Age Pension “taper trap.”

Why these solutions often fit higher-wealth cohorts:

For super funds, members may exhibit differing motivations and awareness of longevity risk solutions.

Adding a Reg 1.06A IRIS solution needs to be grounded in member mix, observed retirement behaviour (rollouts, lump sum withdrawals, ABP take-up), and the fund’s support model (digital guidance, education, advice access).

Part of that consideration will also include, as we discussed in the previous edition, the retention challenge many profit-to-member funds face from non-aligned advice entities now powering pre-retiree outflows toward the new breed of wealth platforms.

Super Consumers Australia (SCA) has updated its Retirement Savings Targets for Homeowners. These targets are the result of a research project undertaken in 2022 to better understand actual retiree behaviour across three representative household cohorts by spending patterns (Low, Medium, High) and two by partners status (Single and Couple).

The budgets indicate that a single medium spending retiree would likely need around $44,000 per year in retirement, while an equivalent couple would need $64,000.

The updated SCA numbers for current retirees are as follows:

Like the ASFA Retirement Standards, the SCA Retirement Savings Targets presume debt-free home ownership in retirement. Our research suggests the percentage of households over-65 who aren’t even homeowners currently sits somewhere in the 18% to 20% range (depending on age cohort).

The new SCA numbers differ somewhat from those produced in the ASFA Retirement Standard, which tracks two notional representative households:

These two ASFA retirement standards have assumed debt-free homeownership since launching in 2004.

To its credit, ASFA has now introduced a ‘Modest lifestyle’ budget for renters as of mid-2025, with the ‘Modest lifestyle (renters)’ budget currently at $49,676 p.a. for singles and $67,125 p.a. for couples. Eagle-eyed readers will note that these renter budgets are far closer to the ‘Comfortable lifestyle’ numbers than they are to the ‘Modest lifestyle’ equivalents.

SCA followed in early December with its own Retirement Savings Targets for Renters, with their Single Medium budget coming in at $63,000 p.a. and Couple Medium at $84,000 p.a. As a result, the SCA finds that renters need 1.5 to 3 times more superannuation than equivalent homeowners to enjoy the same standard of living in retirement.

While both ASFA and SCA are to be congratulated for acknowledging the growing issue of renter retirees (albeit belatedly), the concept of 'retirement budgets’ as a whole is probably overdue a deeper revisit.

The ASFA Comfortable budget is widely used by super funds in:

Yet the 2020 Retirement Income Review elected instead to preference a replacement rate methodology (65% to 75% of pre-retirement disposable household income) rather than any fixed, periodically-updated, budget standard.

While we acknowledge the value of super balance projections in providing members some sense of goal tracking, household retirement expenditure tends to be heterogeneous in nature. A professional pre-retiree couple with household net income well north of $150,000 p.a. would be as affronted by the thought of living on $76,000 p.a. in retirement as a pre-retiree single-income couple might find it aspirational.

The Lumisara view generally aligns with the Retirement Income Review replacement rate methodology, albeit taking a household balance sheet lens (including the tax-transfer system) into account when determining sources and adequacy of retirement income.