The Association of Superannuation Funds of Australia (ASFA) has welcomed the introduction into Parliament today of the Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021.
“The legislating of a retirement income covenant is a significant step in encouraging the further development of the retirement phase of superannuation and should assist members to be able to make informed decisions in retirement,” said ASFA Deputy CEO, Glen McCrea.
The bill will codify an obligation for super trustees to put in place a retirement income strategy that outlines how it plans to assist its members in retirement. The strategy must consider how the trustee will guide and support its members to balance three objectives of maximising income in retirement, managing various risks and having some flexible access to savings.
Subject to the passage of the bill, the covenant will take effect from 1 July 2022.
“ASFA supports the creation of a retirement income covenant. The bill introduced today will see trustees develop a framework to assist super fund members make decisions about their super savings in retirement.
“We would encourage the Parliament to pass this legislation so that superannuation funds can begin implementing these important reforms. We look forward to seeing APRA’s guidance about trustees’ retirement income strategies soon, so when developing their retirement income strategy for 1 July 2022, trustees know what APRA expects.”
ASFA also urges the Parliament to pass the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 to ensure that those workers who are paid less than $450 per month can receive superannuation. This will benefit 300,000 low-income Australians of whom approximately 63% are women.
“This is an important step towards providing adequate retirement savings for low-income earners, particularly for women and younger Australians, whose superannuation is adversely affected by the $450 threshold,” said Mr McCrea.
“With a maturing superannuation system, a greater proportion of Australians are able to achieve dignity in retirement through relying more on their super savings and less on the Age Pension. Given this, it is important that members are assisted to make informed decision about their super savings that will increase their standard of living in retirement,” Mr McCrea concluded.
For further information, please contact:
Jacqui Maddock, 0451 949 300.
ASFA is the peak policy, research and advocacy body for Australia’s superannuation industry. It is a not-for-profit, sector-neutral, and non-party political, national organisation. ASFA’s mission is to continuously improve the superannuation system, so all Australians can enjoy a comfortable and dignified retirement.
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