Retirement
Super’s ‘under-developed’ retirement strategies to be sharpened
The super sector’s lack of focus on members’ retirement needs has to be addressed, Treasury has said while releasing the proposed principles for super funds’ retirement income covenant.
Super’s ‘under-developed’ retirement strategies to be sharpened
The super sector’s lack of focus on members’ retirement needs has to be addressed, Treasury has said while releasing the proposed principles for super funds’ retirement income covenant.
“For too long superannuation has been focused only on accumulating savings,” Minister for Revenue and Financial Services Kelly O’Dwyer said on Thursday.
“A retirement income framework is a pivotal part of the government’s reform agenda for superannuation – an agenda squarely focused on protecting and improving outcomes for superannuation members.”
The retirement income covenant, confirmed in the 2018-19 budget, would require trustees help members meet their retirement income goals.
“To fulfil the overarching purpose of superannuation, it is essential that trustees develop a retirement income strategy and consider the retirement income needs of their members,” Ms O’Dwyer said.
The position paper is open for interested parties to provide submissions on by 15 June this year and will be the “cornerstone” of the government’s retirement income framework.
The implementation of the covenant and its associated regulations will be followed by the development of standardised product disclosure metrics. Treasury says these metrics will help Australians understand and make decisions about retirement income products.
The proposed covenant has two key principles.
1. Retirement income strategy
The position paper said trustees should have a “fundamental obligation” to help members meet their retirement income objectives.
This means super trustees would be required to develop strategies to ensure appropriate products are developed and offered to retirees.
Trustees would need to take into account members’ potential life spans, the costs and benefits of longevity risk-management, general risk management needs, access to capital and members’ preferences in regard to these factors.
The products and strategies would also need to consider member eligibility for the age pension, the likelihood and severity of potential cognitive decline and the respective costs and benefits of in-house and third-party products.
2. Engagement
Trustees would be required to provide guidance or tools to allow members to move between the funds’ different products.
“The retirement phase of the superannuation system is currently under-developed and needs to be better aligned with the overall objective of the superannuation system of providing income in retirement to substitute or supplement the age pension,” the position paper said.
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Retirement reimagined as Australian optimism meets inflation worries in 2023 super fund insights
The latest reports on retirement confidence among Australians present a spectrum of sentiments, with fresh data revealing surprising optimism in some quarters while exposing underlying concerns in ...Read more
Superannuation
Aussie retirees face a shortfall as ideal retirement nest egg doubles what super will deliver
As Australians look towards retirement, the desired superannuation balance that many believe will ensure a comfortable retirement has significantly outpaced what they are on track to actually save. Read more
Superannuation
Super funds eye 6.5% return in 2023, despite a rocky start
As the year draws closer to its climax, Chant West unveils its projection for super funds in what can only be described as a year of economic ebbs and flows. Read more
Superannuation
A deep dive into Australia’s superannuation system
Australia has a robust retirement savings system known as superannuation designed to provide financial security to Australians in their post-work years. Read more
Superannuation
50,000 super fund members impacted by data breach
Around 50,000 member records were impacted by the breach that took place earlier this month. Read more
Superannuation
Two super funds tipped to reach $1tn by 2040
KPMG has released the findings from a new review. Read more