The obligation on superannuation funds to develop a retirement income strategy for members by 1 July, next year, has been backed by the Actuaries Institute of Australia.
Amid continuing debate over the capacity for superannuation funds to deliver on such retirement plans in the absence of advice, the convenor of the Actuaries Institute Retirement Strategy Group, Andrew Boal acknowledged that there was no one-size-fits-all approach.
“We also support the government’s plans to prioritise the development of a retirement income covenant, and that all superannuation funds should develop a retirement income strategy for members,” he said.
However, he said the income needs and spending patterns in retirement could and did vary significantly and there was no one-size-fits-all solution.
“We strongly support the notion that trustees should consider eligibility for the Age Pension when considering a member’s income in retirement, and also how cognitive decline may affect outcomes,” Boal said.
He pointed out that most retirees with superannuation balances above $50,000 by a reasonable margin would still be receiving a full Age Pension, indexed and guaranteed by the government and that at this level members were likely to already have longevity protection for at least 80 per cent of their retirement income.
Boal said that, in meantime, superannuation funds had to develop a retirement income strategy for members by 1 July, 202, with changes to the Superannuation Industry (Supervision) Act adding a Retirement Income Covenant which would codify the requirements and obligations of superannuation trustees to consider the retirement income needs of their members, expanding individuals’ choice of retirement income products and improving standards of living in retirement.
