Jim Hennington has helped Australian savers to understand their Supers while they are working. But now millions of Australians are beyond saving and want to spend their savings.
How good are Supers at helping people do this. This is what we call the VFM of decumulation or (more simply) how good are they at paying pensions!
Jim and his colleague Clarissa turn their gaze on pensions from Supers and a simple way of judging them!
Here’s Clarissa Horwood, a colleague of Jim’s in the Australian press.
Penny had done everything she was supposed to do. She worked for more than 40 years. She paid her taxes. She contributed to her super fund every month without really thinking about it. Like many, she trusted that one day the system would somehow look after her.
Retirement was always vaguely on the horizon. Not tomorrow. Not next year. Just… eventually. Then one day, eventually arrived.
Penny wasn’t worried about leaving work. She was worried about leaving familiarity. She had savings, a respectable super balance, and no debt. Friends assured her she would be fine. The problem was that nobody could tell her what “fine” actually looked like.
Could she afford to spend $70,000 a year? Should it be $50,000? Would her money last another thirty years? Was she entitled to any Age Pension? Would a different investment option let her enjoy life more comfortably?
Every answer seemed to begin with another disclaimer. Every phone call ended somewhere else. Spending the money she had spent a lifetime accumulating suddenly felt far more complicated than earning it.
Penny is not unique. Forget the different account balances – how many Australians across the country shared the very same uncertainty?
Not about wealth
That is where the system becomes much less certain, because retirement is not ultimately about wealth.
Nobody retires hoping to admire an account balance. They retire hoping to live. To visit the grandchildren more often. To know they can afford the healthcare they’ll need as they grow older. To meet friends for dinner because they can. To travel while their knees still allow it. To say “yes” a little more often than “I’d better not”.
That is what a good retirement outcome looks like.
Penny hadn’t spent four decades saving only to spend retirement wondering whether she could afford to enjoy it.
She wanted the confidence to enjoy her super without worrying that every extra dollar spent today might create a problem ten years from now.
Those hopes were starting to create a quiet unease. Penny felt that the people safeguarding her nest egg were not helping her make good decisions. She knew she couldn’t be the only Australian asking that very same question.
Her uncertainty reflects a much larger problem within the superannuation industry itself. Even in 2026, its leaders have not settled on how a better retirement outcome should be defined or judged in practice.
Many funds still lack a clear and consistent way to define success for members in retirement. Although the industry has identified many relevant member needs, it has not yet translated them into a settled framework for judging whether one retirement strategy produces a better outcome than another.
As APRA deputy chair Margaret Cole told the 2025 Conexus Retirement Leaders Summit, trustees had “fallen short in tracking and measuring the success of their retirement income strategies”. The industry has plenty of metrics, but no settled way of determining what success ultimately looks like.
Balance three objectives
The Retirement Income Covenant tells trustees to help members balance three objectives: maximising expected retirement income, managing risks to its sustainability and stability, and some flexible access to funds during retirement. These are important considerations. But together they form a list of competing objectives, rather than an objective scoreboard.
Until trustees define what a better retirement outcome actually means, they cannot be clear about what outcome they are trying to improve for members such as Penny. As a result, they lack a sound basis for deciding whether a fund’s existing solution should be changed, whether one new product is better than another, or whether a strategy has genuinely improved outcomes for members in retirement.
That is the troubling disconnect at the centre of the retirement system: between the lives members hope to lead and the outcomes trustees are accountable for delivering. The industry has not yet translated the human needs sitting beneath Penny’s unease into clear objectives for super funds.
Penny was no actuary, but she had a good head for numbers. What she cared about wasn’t higher returns, extra investment choice or a fancy retirement calculator.
She simply hoped her super would allow her to live as well as her savings could reasonably support, using them efficiently, safely and without forcing a series of frightening decisions upon her.
Choose the ‘best’
If Penny were presented with several funds offering different retirement solutions and asked to choose the “best”, she would almost certainly favour the one that allowed her to sustain more spending each year and enjoy a better lifestyle without anxiety.
Penny would choose the fund that allows her to be a little more generous with her family at birthdays. To take two annual holidays instead of one. To employ a gardener occasionally, order a decent bottle of wine with dinner, or shout her best friend to nice seats at the theatre.
The “better” fund would give her more capacity to enjoy her retirement – but this cannot simply mean spending her balance faster at the expense of her future.
Penny could only relax into a better lifestyle if she believed it could last. She needed to know that tomorrow had been considered too. A high income from super today would be of little comfort if it created a constant fear of running short later.
Her friend Helen might value certainty above almost everything else. She would willingly give up some flexibility in exchange for knowing that a portion of her income would continue for life no matter what.
Her neighbour Peter might be comfortable accepting some investment fluctuations, provided he knew he’d retain accessible savings for future health or aged-care costs and a reasonable chance of leaving something to his children.
Penny, Helen and Peter may each prefer different settings, but they all want their super to support the best possible standard of living reasonably available to them.
For ordinary Australians, retirement success should be measured simply: by the highest sustainable annual spending their super can support. Individual risk preferences, flexibility and bequests may shape people’s trade-offs, but they should not obscure the fundamental goal.
Seen through Penny’s eyes, it all feels surprisingly obvious.
Clarissa Horwood is a retirement writer who has worked alongside actuaries, advisers and retirement-income specialists through Apricot Actuaries, Jubilacion and Optimum Pensions. She now works with SCAN, a specialist actuarial service focused on helping advisers and institutions compare and assess retirement-income strategies.
