The Association of Superannuation Funds of Australia (ASFA) has welcomed the introduction of the retirement income covenant into Parliament.
The Corporate Collective Investment Vehicle Framework and Other Measures Bill 2021 would codify an obligation for super trustees to demonstrate how a retirement income strategy plans to assist its members in retirement.
It must consider how the trustee would guide and support its members to maximise income in retirement, manage risk and provide flexible access to savings.
“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,” ASFA deputy chief executive, Glen McCrea, said.
“We would encourage the Parliament to pass this legislation so that superannuation funds can begin implementing these important reforms.
“We look forward to seeing the Australian Prudential Regulation Authority’s (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.”
Subject to the passage of the bill, the covenant will take effect from 1 July, 2022.