Aware Super has welcomed the draft Retirement Income Covenant (RIC) legislation but the industry will need the right policy settings to allow superannuation funds to provide appropriate and personalised retirement income guidance.
In its submission to Treasury on the draft legislation, Aware Super said it was critical funds were able to tailor their approach to the individual needs of members to deliver the best retirement outcomes.
Aware Super chief executive, Deanne Stewart, said she looked forward to the RIC passing into legislation as soon as possible.
“In everybody’s superannuation journey, the retirement phase is absolutely critical. After all, ensuring that members have dignity in retirement is the whole point of the super system. And yet, for too long, the retirement phase has been the poor cousin of the accumulation phase,” she said.
“It’s pleasing that the importance of the retirement phase will now be recognised in legislation as all super funds have a responsibility to help their members get the best possible outcomes, not only as they plan for retirement, but as they live it too.”
Aware Super said the upcoming Quality of Advice Review should consider how intrafund advice could be better used to deliver high-quality, affordable advice to members.
It encouraged the Government to give priority consideration to regulations that made it easier for funds to offer meaningful, consistent information to every member, through tools such as enhanced calculators and income projections.
“When it comes to retirement, you can’t take a one-size-fits-all approach. The proposed Retirement Income Covenant acknowledges that, but we’d also like to have the framework in place to provide more support to all members as they approach and enter retirement,” Stewart said.
“Most members won’t need full, comprehensive advice to achieve a better retirement. But the right help at the right time really can make all the difference.
“We strongly believe that all super members should have access to quality, affordable, tailored help to support them to feel confident to spend their savings in retirement.
“To deliver on this, it is critical there is greater clarity around the scope to provide intrafund advice and other less complex support services.”