In short
The retirement phase of the superannuation system needs to be more in line with the overall objective of superannuation.
We’re addressing this need by developing a retirement income framework.
Aims of the framework
The Retirement Income Framework’s aims are to:
- increase individuals' standard of living in retirement
- increase the range of retirement Comprehensive Income Products for Retirement (CIPR) products available
- empower trustees to provide members with an easier transition into retirement
- increase the efficiency of the superannuation system
- focus the superannuation industry on providing income to members in retirement.
Background
There was an inquiry into Australia’s financial system in 2014.
In response, the government agreed to support super funds to develop more CIPRs.
Developing the framework
To develop the framework we:
- released a discussion paper for public consultation between 15 December 2016 and 7 July 2017
- consulted the Australian Government Actuary (AGA) on how to certify a product meets the requirements of a CIPR. AGA prepared a report on a potential actuarial test
- appointed a consumer and industry advisory group in February 2018. The group advised on a scope and possible options for a retirement income covenant.
Framework stages
We announced 2 stages of the framework in the 2018–19 Federal Budget:
- a retirement income covenant
- a standardised, simplified disclosure for retirement income products.
Retirement agreement covenant
After these announcements we released a position paper for public consultation.
The paper comprises a retirement income covenant. The covenant proposes superannuation fund trustees should:
- develop a retirement income strategy for their members
- develop and offer CIPRs to their members
- help their members choose a CIPR that suits their needs and preferences.
Consultation on the paper closed on 15 June 2018.