Trustees of self-managed superannuation funds (SMSFs) will be unaffected by the legislation in the upcoming Retirement Income Covenant.
In the exposure draft for the covenant, issued by Treasury on 27 September, it said the covenant would not apply to trustees of SMSFs.
The covenant would require trustees to have a strategy to assist beneficiaries to achieve the objective of maximising their expected retirement income, managing expected risks to the sustainability and stability of their expected retirement income; and having flexible access to expected funds during retirement.
“Schedule 1 to the Exposure Draft Bill inserts a new covenant in the SIS Act that requires trustees of a RSE to develop a retirement income strategy for beneficiaries who are retired or are approaching retirement,” it said.
“This covenant does not apply to trustees of self-managed superannuation funds.”
This amendment would be welcome news to SMSF members who had previously stated they wanted Treasury to ensure consideration was given regarding the size of SMSFs compared to large super funds.
SMSF Association chief executive, John Maroney, also pointed out there was “overlap” between the Retirement Income Covenant and the Investment Strategy Covenant which could cause confusion for trustees.