The Federal Government has released a new Retirement Reporting Framework and Best Practice Principles for Superannuation Retirement Income Solutions, aimed at strengthening the retirement phase of Australia’s superannuation system.
Treasurer Jim Chalmers and Assistant Treasurer and Minister for Financial Services Daniel Mulino said the changes are designed to ensure the system delivers better outcomes for Australians as they move from saving to drawing down their super.
“Today, we are releasing the Retirement Reporting Framework and Best Practice Principles for Superannuation Retirement Income Solutions to deliver on our commitment to uplift the retirement phase of superannuation,” they said.
They said the reforms are intended to strengthen the system across both stages of working life. “These reforms are all about strengthening the system to deliver the best results for Australians when they retire, as well as when they’re working.”
Australia’s superannuation pool, now valued at $4.5 trillion, is entering what the ministers described as a critical period, with more than 2.5 million Australians expected to retire over the next decade. They said the measures would ensure the retirement phase receives the same level of policy and product focus as the accumulation phase.
“The reforms will ensure there is as much of a policy and product focus on the retirement phase as there is on the accumulation phase,” they said.
According to the ministers, the framework is designed to increase transparency and encourage trustees to improve retirement products. “They will improve transparency and drive trustees to innovate and deliver better retirement solutions for their members.”
They said the changes would give retirees greater confidence. “This will help Australians retire with more confidence knowing they have access to the right product solutions, information, and strategies to help them make the most of their superannuation.”
The Best Practice Principles provide guidance to trustees on how to design and deliver retirement income products. “The Best Practice Principles set out clear guidance for trustees on the design and delivery of retirement income solutions, to support industry progress towards best practice. They outline the steps funds can take to better understand members, design fit-for-purpose solutions, and engage their members on retirement income decisions.”
The government has released a new Retirement Reporting Framework and Best Practice Principles to strengthen the retirement phase of Australia’s $4.5 trillion superannuation system.
More than 2.5 million Australians are expected to retire in the next decade, prompting a stronger policy and product focus on retirement income solutions.
APRA will collect and publish data under the new framework to improve transparency and track fund performance and member outcomes in retirement.
The reforms build on earlier superannuation changes, including lifting the Superannuation Guarantee to 12 per cent and introducing payday super from 1 July this year.
Under the Retirement Reporting Framework, industry data will be collected to track performance and member outcomes in the retirement phase. “The Retirement Reporting Framework will collect data on industry progress in the retirement phase of superannuation and drive uplift to member outcomes by creating greater transparency across industry.”
The Australian Prudential Regulation Authority will be responsible for collecting and publishing the required data. “The Australian Prudential Regulation Authority (APRA) will collect and publish the data required to give effect to the Framework, providing insights on fund offerings and member outcomes and helping track progress on uplift across the sector.”
The ministers said the measures build on earlier reforms introduced under the Retirement Income Covenant and would be subject to review. “These measures build on the obligations introduced by the Retirement Income Covenant. They will be reviewed regularly to ensure they remain fit for purpose and reflect evolving industry practice.”
They said the broader aim was to support better outcomes in retirement. “Together, these reforms will help Australians achieve higher quality retirement outcomes after a lifetime of saving, consistent with the objective of superannuation.”
The statement also highlighted earlier legislative changes to the super system. “Labor built the superannuation system, and these reforms build on our work making the system stronger, fairer and more sustainable.”
They pointed to measures already enacted or underway. “We’ve legislated the objective of superannuation, lifted the Superannuation Guarantee to 12 per cent, we’re paying super on government-funded paid parental leave and we’ve legislated payday super to start on 1 July this year. We’re boosting the superannuation savings of more than a million low-income workers, and better targeting tax concessions on large balances.”
Further steps include expanding performance testing and aligning reporting standards. “We’ve also expanded the Performance Test to more products, legislated to align the financial reporting required of funds with those of public companies, committed to introduce mandatory member service standards, and we’re working to improve consumer protections.”
