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The government announced it has committed to improving the retirement phase of the super system for all Australians with newly introduced reforms.
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Government makes move to bolster retirement phase of superannuation
22 November 2024
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In a joint statement, treasurer Jim Chalmers and assistant treasurer Stephen Jones announced the Albanese government was set to take action in reforming the retirement phase of the superannuation system.
The government said the reforms would give retirees more peace of mind, help them make their super go further and provide more support to navigate retirement.
The focus behind the reforms was outlined to ensure that there was as much of a policy and product focus on the retirement phase as there was on the accumulation phase.
“As our economy changes, population ages and the super system evolves, more and more Australians will draw down on bigger pools of savings that they will rely on for longer,” Chalmers said.
“Within the next decade, over 2.5 million Australians are expected to retire. Within two decades, most people retiring will have been accumulating superannuation at nine per cent or more annually for the duration of their working lives.”
The reforms would focus on critical areas in an attempt to strengthen retirement outcomes and would include enhanced independent guidance, better retirement products, best practice principles and increased transparency.
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The government said it would expand and refresh resources on the Moneysmart website which would ensure retirees had easy access to independent, reliable information on super 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,” the government said.
The reforms would also attempt to drive innovation in quality retirement products which would give members more options to meet their needs and maximise their super, by improving income stream regulations.
The updated regulations would commence from 1 July 2026, with prior consultation on draft regulations.
Proposed changes to the income stream regulations included money back guarantees and instalment payments instead of an upfront lump sum.
The reforms would include the introduction of a new set of voluntary best practice principles which would also be open to consultation in 2025.
In addition to this, a new reporting framework on retirement outcomes would offer members greater transparency and create common understanding and would commence from 2027.
“APRA will collect and publish data on an annual basis, so progress can be measured over time. The design of metrics and process will be informed by Treasury-led consultation from next year,” the government said.
Chalmers said these changes would build on the obligations introduced by the Retirement Income Covenant and work in tandem with the Government’s Delivering Better Financial Outcomes package.
“These changes will empower more Australians to make the most of their superannuation through more trusted information, better products and greater transparency,” Chalmers said.
“They will help ensure super delivers on its foundational promise of providing a dignified retirement for more Australians.”
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