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.
RELATED ARTICLES
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
Superannuation
Australia's super test dilemma reform could boost long-term gains while keeping accountability sharp
APRA’s latest performance test results have reignited a structural debate: can Australia hold funds to account while still backing the nation’s long-horizon investment needs? With the government ...Read more
Superannuation
Super funds rethink strategy as APRA's performance test hits a fork in the road
The latest performance test results have reignited debate over Australia’s superannuation benchmarking regime and prompted a formal government review. Behind the headlines, boards are quietly rewiring ...Read more
Superannuation
Aware Super enhances digital tools for financial advisers, boosting efficiency and client engagement
Aware Super has unveiled a suite of new digital features designed to streamline the workflow for financial advisers and their clients. This significant upgrade includes direct data feeds to Xplan and ...Read more
Superannuation
Super funds flip the script as APRA's performance test sparks strategic overhaul
Australia’s performance test has lifted the floor on retirement outcomes—and divided the industry in the process. After early shockwaves, failure rates have fallen and fees have trended down, but ...Read more
Superannuation
Rewiring Australia’s super performance test: from compliance brake to capital engine
Can an accountability tool double as a nation-building lever? Canberra’s review of the superannuation performance test aims to preserve member protection while freeing funds to back long-dated assets ...Read more
Superannuation
Superannuation guarantee rate rises to 12 per cent as parental leave changes take effect
The superannuation guarantee rate has increased from 11.5 per cent to 12 per cent from Tuesday, with super contributions also being added to Commonwealth Parental Leave Pay for the first time. Read more
Superannuation
Rest's Sustainable Growth option achieves highest sustainability classification
Rest superannuation fund has achieved the highest sustainability classification for its Sustainable Growth investment option from the Responsible Investment Association Australasia. Read more
Superannuation
Aware Super slashes admin fees for retirees by up to 25 per cent
Aware Super has reduced administration fees for members with a retirement income account by up to 25 per cent and lowered the maximum annual fee. Read more
