When future retirees don’t look like today’s

Most retirement policy, understandably, is focused on retirees and near-retirees. But the Actuaries Institute’s latest intergenerational equity index is a reminder that the next retirement cohort may arrive with a very different balance sheet.

Lower housing security, uneven family support and widening wealth dispersion all matter for retirement income design. A system built around the homeowner default will not work equally well for members who do not fit it.

This edition also looks at NGS Super’s digital advice build-out and Treasury’s proposed performance-test reforms.

The Actuaries Institute has released its 2026 update to the Australian Actuaries Intergenerational Equity Index (AAIEI), its most detailed assessment of generational wealth and wellbeing since the index launched in 2020. Tracking 25 indicators across six domains (economic, housing, health, social, education and environment), the index paints a sobering picture of widening disparity between younger and older Australians.

The headline finding is stark: the gap in wealth and wellbeing between 25–34 year olds and 65–74 year olds has grown from 41 index points in 2000 to 56 points in 2025. While pandemic-era spending and a strong labour market temporarily narrowed the gap in 2021–22, that improvement has since unwound.

The drivers are familiar: housing costs, skewed wealth accumulation and fiscal pressures that weigh disproportionately on younger cohorts. The wealthiest 10% of 65–74 year olds now hold roughly 40% of that age band's total wealth. A 30 year old today also inherits a Commonwealth net debt burden of 20% of GDP, more than double the debt faced by today's 50 year olds at the same life stage.

Encouragingly, the labour market has been a relative bright spot, with real household income growth among 25–34 year olds behind only the 45-54 year old cohort, while also experiencing a fall in the gender pay gap.

The AAIEI update is a timely and well-constructed piece of work, and its retirement income implications deserve closer attention than the broader intergenerational framing might suggest.

The index confirms what many in the retirement sector already sense: Australia's retirement system is increasingly calibrated for a cohort of home-owning, superannuation-accumulating retirees that future generations may not resemble.

The poverty rate finding is particularly telling. The 65–74 age band simultaneously holds the highest average net wealth of any group and the highest poverty rate, a paradox explained by illiquid housing wealth and the inadequacy of the Age Pension for non-homeowners. As the report notes, superannuation accounts for just 25% of retiree wealth against 48% in housing. When the next cohort of retirees arrives with lower home ownership rates, that structural dependency on property becomes a system-wide risk, not merely an individual hardship.

The Bank of Mum and Dad data point, already estimated to function as one of the country's largest home lenders, also warrants serious reflection. Intergenerational wealth transfers of this kind increasingly determine retirement preparedness for the generation that follows, creating a feedback loop that entrenches intragenerational inequality alongside intergenerational inequity.

For super funds, the AAIEI reinforces the case for differentiated solutions that work for renters, non-homeowners and those without family capital to draw upon. The adequacy debate cannot remain anchored to the homeowner default.

NGS Super has overhauled its member advice offering with the launch of a suite of digital guidance tools and expanded planning services, positioning the fund at the forefront of the push for scalable, affordable advice. Central to the revamp is the NGS Virtual Adviser, a digital tool developed in partnership with Guideway Financial Services that provides guidance on superannuation-related matters including investment choice, insurance, contributions and transition to retirement, with clear pathways to phone-based or comprehensive advice where needed.

The fund has also restructured its advice tiers. The existing Advice Essentials service, introductory personal advice delivered by licensed advisers via phone, video or the digital platform, is joined by a new Advice Essentials Plus offering. That tier is designed to address retirement planning and account consolidation at a cost point below full financial planning. Members requiring broader support retain access to NGS Advice Platinum, delivered by in-house planners.

Educational resources accessible to both members and non-members have also been expanded, with self-directed learning modules now available through the fund's website. Chief executive Natalie Previtera framed the changes as a loyalty dividend: quality advice made accessible regardless of balance or life stage, much of it at no additional cost to members.

NGS Super's announcement is another sign that the digital advice build-out across the superannuation sector is no longer the exclusive province of the largest funds. NGS has around 100,000 members, a fraction of the scale of an Aware or Rest, yet it has arrived at a structurally similar solution: a layered advice architecture anchored by a digital tool, supported by tiered human advice, and framed explicitly around earlier engagement rather than last-minute retirement support.

When we reviewed this space in our 5 November 2025 edition of this newsletter, we noted that Aware Super's Retirement Manager and Rest's Retire Ready had launched without waiting for the final shape of the Delivering Better Financial Outcomes legislation. Funds were clearly unwilling to let regulatory uncertainty delay member-facing investment. NGS's move reinforces that posture.

The NGS Virtual Adviser also extends the vendor field beyond the Bravura/Midwinter axis that has dominated recent announcements, to UniSuper and AustralianSuper’s initiatives with Ignition Advice and new kid on the super digital engagement block, InvestStream. Competitive diversity in the underlying technology is a healthy sign for the market; it reduces the risk of UX and assumption convergence that we flagged as a watch point six months ago.

What distinguishes the NGS model is the explicit tiering from digital guidance through to Advice Essentials Plus and Advice Platinum. That gives the fund a structured escalation path, with commercial flexibility alongside genuine member utility. Whether the Essentials Plus price point proves sticky will be worth watching as the broader advice affordability debate continues to evolve.

Treasury has released a consultation paper proposing the most significant overhaul of the annual superannuation performance test since its extension to trustee-directed products in 2023.

The paper has two broad objectives.

The first is to reduce unintended investment constraints created by the test’s current benchmark architecture. Treasury canvasses three options:

The second objective is expanding the test's coverage. Option 4 proposes extending testing to diversified externally directed accumulation products, a category that has come under scrutiny following the collapse of the Shield and First Guardian Master Funds.

The paper also asks longer-term questions about whether single-sector and retirement phase products should eventually be brought within scope.

This consultation has been a long time coming. Industry has been making the benchmark-hugging critique since at least 2022: the test's SAA-benchmarking architecture creates structural incentives to minimise short-term tracking error rather than pursue genuinely optimal long-term portfolios. Treasury is now, finally, presenting options that go beyond incremental calibration.

The most consequential proposal is Option 2: replacing the strategic asset allocation benchmark with a simple reference portfolio assessed on a risk-adjusted basis. This is a genuinely different philosophy of measurement. It asks not ‘did you implement your stated strategy well?’ but ‘did you deliver adequate returns for the level of risk you took?’ That is a more demanding, and more member-centric, question.

The New Zealand Superannuation Fund and CalSTRS are cited as international precedents, which lends the approach credibility. The practical difficulties are also real: unlisted asset valuations lag market pricing, potentially flattering volatility figures and creating perverse incentives, and the construction of the reference portfolio itself will be contested.

From a retirement income lens, Option 4 warrants particular attention. APRA's own data indicates that around 35% of non-platform externally directed products were underperforming and untested in 2025, and Super Consumers Australia found that 91% of accumulation products that failed the test between 2023 and 2024 had an equivalent untested retirement product. The accountability gap is material.

Retirement product testing appearing to be on hold pending the commencement of the Retirement Reporting Framework is somewhat disappointing. That it remains a longer-term aspiration, rather than an active proposal in this round, is illustrative of the broader cadence of retirement income progress at present.

Should you wish to make a submission, you can do so via consult.treasury.gov.au. Submissions close on 19 June 2026.