Govt sets its pre-election retirement income agenda

Key superannuation industry stakeholders have welcomed the Government’s announcement of improvements to the retirement phase of superannuation, including the ability to offer money-back guarantees on retirement products.

The improvements, announced by the Treasurer, Jim Chalmers, to the Association of Superannuation Funds of Australia national conference in Sydney have been welcomed by ASFA itself, the Council of Australia Life Insurers, Challenger Group, MLC and AMP Limited.

The package outlined by Chalmers are intended to work “in tandem” with the Government’s Delivery Better Financial Outcomes legislation and  involves an upgrade to the Australian Securities and Investments Commission (ASIC) Moneysmart web site, regulations that better support the development of retirement income products, a new set of voluntary best practice principles for superannuation funds and a new reporting framework on retirement outcomes.

As outlined by Chalmers, these are “four critical areas to strengthen retirement outcomes”:

• Enhanced independent guidance: The Government will expand and refresh resources on the Moneysmart website, ensuring retirees have easy access to independent, reliable information on superannuation and retirement options.

ASIC will lead a consumer education campaign to raise awareness amongst people approaching retirement and in retirement. New resources will start rolling out in the first half of 2025.

• Better retirement products: By improving the innovative income stream regulations, the reforms will support innovation in quality retirement products, giving members more options that meet their needs and helping them make the most of their super. The updated regulations will commence from 1 July 2026, with consultation on draft regulations ahead of this.

The changes include allowing funds to offer product features that members want, such as money back guarantees and instalment payments instead of an upfront lump sum.

• Best practice principles: A new set of voluntary best practice principles will guide the superannuation industry in designing modern, high‑quality income products that support Australians’ financial security in retirement. Consultation on draft principles to begin in 2025.
• Increased transparency: A new reporting framework on retirement outcomes will offer members greater transparency and create common understanding for success in the retirement phase.

Chalmers said the new Retirement Reporting Framework will commence in 2027 and enable monitoring of the outcomes delivered to members in retirement in a consistent and transparent way.

He said the Government has also tasked APRA and ASIC with undertaking a “Pulse Check” report by the end of next year to monitor trustees’ progress in implementing their strategies under the Retirement Income Covenant.

ASFA chief executive, Mary Delahunty welcomed Chalmers’ announcement describing the changes as a step forward saying ASFA especially welcomed the focus on improving consumer education and guidance.

CALI chief executive, Christine Cupitt described the announcement as a big win and welcomed it for helping Australians better navigate what can be a complex life stage.

Challenger chief executive, Nick Hamilton said the announcement aligned with some key recommendations from Challenger including the introduction of innovation to make it simpler for industry players to offer money-back guarantees.