The Government has established the parameters for its long-awaited review of the pension arrangements for small superannuation funds.
The pensions arrangements, which became a central issue in last year’s Federal Budget, were referred to a team within the Department of Treasury which has now released a discussion paper to form the basis of industry consultation.
In releasing the document, the Assistant Treasurer, Mal Brough said it outlined the key issues and canvasses options for dealing with those issues.
The discussion paper said the initial round of submissions suggested a number of proposals to overcome issues with small funds providing defined benefit pensions with three possible strategies emerging.
Looking at the strategies, the discussion paper said that, to varying degrees, each could allow small funds to provide a broader range of pensions to their members, and could address, either directly or indirectly, the taxation, social security, risk and complexity issues raised.
The strategies canvassed in the discussion paper include:
n Developing new rules for the provision of defined benefit pensions;
n modifying existing pension products; and/or,
n introducing new pension products.
It said strategies could be implemented separately or in combination, but only to the extent that they are consistent with the Government’s retirement income objectives.
