This article was originally published in the print edition of Retirement Magazine Vol. 3

For much of the past three decades, the superannuation industry has been highly effective at measuring performance during the accumulation phase. Investment returns, fees, insurance and product design have provided clear indicators of success. But retirement, the ultimate purpose of the system, has proven far harder to measure.

As Australia’s retirement system matures, a more fundamental question is emerging: how do we know whether members are truly achieving good retirement outcomes?

This question increasingly sits at the heart of regulatory, trustee and policy focus. Funds must be able to measure, understand and improve retirement outcomes, not just investment performance.

At Aware Super, this question and challenge led to the development of the Retirement Adequacy and Income Stream Efficiency (RAISE) framework. RAISE is an approach designed to measure member success across both the accumulation and retirement journeys and to embed that measurement into decision-making across the fund.

From product metrics to member outcomes

Historically, accumulation success has been relatively straightforward to measure. MySuper regulation has largely framed member outcomes through product-level metrics, supported by a range of strong default settings. As a result, returns, fees and insurance outcomes have served as clear and tangible indicators of both product performance and member outcomes.

Retirement outcomes are inherently more complex. They depend not only on balances and investment performance, but also on longevity, member engagement, advice and the design of retirement solutions. The Retirement Income Covenant reinforced this shift by requiring trustees to focus on income, sustainability and capital access, rather than simply product performance. 

“Measuring retirement success at the fund level remains an industry challenge. Many commonly used indicators provide useful benchmarks but limited strategic insight.”

Yet measuring retirement success at the fund level remains an industry challenge. Many commonly used indicators, such as ASFA standards or survey-based retirement readiness, provide useful benchmarks but limited strategic insight. They often cannot distinguish between outcomes driven by, or meaningfully influenced by, fund actions and those driven by external forces such as markets, policy or demographics.

As the system matures, funds increasingly need a coherent framework that can measure outcomes, attribute drivers, and guide decision-making.

Spanning the full superannuation journey

RAISE was designed to be built around two complementary measures: retirement adequacy (RA) and income stream efficiency (ISE). Together, these measures answer a simple but powerful question: are members building enough savings, and are they using them effectively?

The framework builds on the same technical foundations used in Aware Super’s member-facing digital advice tools (My Retirement Planner and Retirement Manager), enabling outcomes to be assessed at the individual level and aggregated to provide enterprise-wide insight. This alignment allows trustees to move seamlessly between individual member outcomes and fund-level performance.

Importantly, the framework recognises that outcomes are shaped by multiple drivers – member decisions, trustee actions and external factors such as market conditions and policy settings. A key design feature is the ability to isolate the component part of outcomes the fund can directly influence, enabling clearer measurement of value delivered to members.

Measuring accumulation success: retirement adequacy

Retirement Adequacy reflects the core purpose of the accumulation phase — helping members build sufficient savings to support their desired living standard in retirement.

The measure compares projected retirement income against a target derived from replacement rate concepts. Targets are calibrated to reflect differences across the membership, recognising that lower-income members typically require higher replacement rates, while higher-income members require lower proportional replacement.

A score of 85 per cent, for example, indicates that members are projected to achieve 85 per cent of their retirement income target, accounting for investment uncertainty and risk. The framework does not reward excessive risk-taking simply to increase projected income, ensuring that measured improvement reflects genuine improvement in member outcomes.

Measuring retirement success: income stream efficiency

While accumulation determines how much savings members retire with, retirement outcomes ultimately depend on how effectively those savings are converted into sustainable income. 

Income stream efficiency measures the proportion of sustainable income members are projected to achieve relative to their sustainable income potential. Sustainable income potential is defined as the level of income that can be maintained over retirement given accumulated savings and expected longevity. 

A score of 75 per cent, for example, suggests members are receiving only three-quarters of the income they could sustainably achieve. This gap may reflect conservative investment positioning, minimum drawdown behaviour, or limited engagement with retirement solutions and advice.

The measure therefore provides insight into both member behaviour and the effectiveness of retirement solution design, advice and engagement strategies. It highlights where targeted improvements, such as better defaults, personalised nudges and enhanced retirement solutions, can materially improve retirement outcomes.

From measurement to decision-making

RAISE shifts outcome measurement from reporting to active decision-making. The framework enables funds to identify which initiatives deliver the greatest improvement in member outcomes. Attribution analysis can quantify the relative contribution of investment performance, voluntary contributions, fees, retirement solution uptake and broader system effects.

A coherent structure emerges from this approach for prioritising initiatives across the organisation, linking investment, product, advice and engagement to a shared outcome measure. In practice, RAISE becomes a common language across the fund, supporting better resource allocation and member-outcome-focused decision-making. 

The following table illustrates how RAISE can support business planning and the evaluation of policy implications. The examples are illustrative only, rely on simplifying assumptions, and do not represent Aware Super’s enterprise targets.

Value in a changing regulatory environment

Outcome measurement also plays an important role in demonstrating fiduciary value and meeting regulatory expectations. APRA’s evolving member outcomes framework emphasises forward-looking measurement integrated into business planning and decision-making, rather than retrospective reporting.

By providing a clearer link between strategic initiatives and member outcomes, the framework strengthens the ability of funds to demonstrate alignment with the legislative objective of superannuation and the delivery of value in members’ best financial interests.

The ability to measure outcomes coherently is also critical for the whole system. RAISE highlights several characteristics that may be essential for any industry-wide outcome framework:

• A measure spanning both accumulation and retirement phases 
• The ability to separate fund impact from external factors
• Alignment between individual member outcomes and fund-level measurement
• Integration into business and strategic decision-making

Together, these elements support improved transparency, stronger policy insight and better retirement outcomes for members.

By separating external drivers from fund-directed effects, RAISE provides a structured way to assess how alternative policy settings may shape retirement outcomes across the membership.

In addition, the framework recognises that member outcomes are influenced not only by fund actions, but also by broader system and policy settings. By separating external drivers from fund-directed effects, RAISE provides a structured way to assess how alternative policy settings may shape retirement outcomes across the membership. 

This becomes increasingly important in a maturing retirement system, where policy choices relating to lifetime income products, access to retirement advice, retirement income pathway design and the integration of retirement income pillars materially influence member wellbeing.

A means, not an end

Measuring retirement success is a means, not an end in itself. The objective is to improve the financial wellbeing and security of members in retirement.

Frameworks such as RAISE help translate the system’s purpose – delivering sustainable income for a dignified retirement – into measurable, actionable insight. They allow funds to identify where they are delivering value, where gaps remain, and how strategic initiatives can improve outcomes over time.

As the retirement phase becomes the defining challenge of the superannuation system, the ability to measure what truly matters for members will increasingly shape how funds design, prioritise and deliver retirement outcomes.

Nicolas Amado is general manager, retirement, at Aware Super, accountable for end-to-end retirement outcomes for members aged 45 and over, setting strategic direction across the fund’s retirement strategy, propositions, experience and engagement. He has more than 26 years’ experience in senior leadership roles in Australia and abroad. He holds a Bachelor of Applied Science and is a Graduate of the Australian Institute of Company Directors.

Dr Shang Wu is a portfolio manager in investments at Aware Super, specialising in retirement strategy. He defines how member capital is allocated to drive portfolio outcomes and translates that into retirement income design. He is chair of the Actuaries Institute’s Retirement Income Sub-Committee and a member of the Superannuation and Investments Practice Committee. He holds a PhD from UNSW and is a qualified actuary.