As the Retirement Income Covenant (RIC) has implications for financial advice, guidance is needed about the boundaries between the provision of factual information and general advice, according to the Australian Institute of Superannuation Trustees (AIST).
AIST’s submission to the RIC exposure draft legislation said while it supported a principles-based RIC, it recommended consequential legislative and regulatory changes.
The changes included:
On how retirees chose to access their retirement balances, AIST said the EM needed to confirm that retirees, and especially those with modest levels of retirement savings, were not precluded from accessing these as a lump sum.
AIST also noted the legislation needed to state that trustees would have regard to the needs of Aboriginal and Torres Strait Islanders in their retirement income strategies and development of cohorts.
The requirement for trustees to make every determination made about their strategy public was unnecessarily onerous and should be removed, AIST believed.
It was also recommended that:
Amid a challenging market environment, three super fund CIOs have warned against ‘jumping at shadows’.
The professional body is calling for the annual performance test to transition to a two-metric test, so it better aligns with the overarching duty of super fund trustees to act in the best financial interests of their members.
AustralianSuper, Rest, and HESTA agree on the need to retain and enhance the test, yet they differ in their perspectives on the specific areas that warrant further refinement.
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
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