In the 2018-19 Budget, the Government announced that it is developing a retirement income framework. The purpose of the framework is to provide retirees with greater choice of retirement income products and provide retirees with the right information to make a choice.
The Government has proposed that a retirement income covenant will be introduced in the Superannuation Industry (Supervision) Act 1993, which will require Trustees to develop a strategy that would help members achieve their retirement income objectives. The Government proposes to legislate the covenant by 1 July 2019, with commencement to be delayed until 1 July 2020.
The proposed covenant would require Trustees to offer Comprehensive Income Products for Retirement (CIPRs): products that provide individuals income for life, no matter how long they live. Members will not be required to take up a CIPR at retirement, but the introduction of CIPRs will increase the choice of retirement products available and improve access to products that efficiently manage longevity risk.
On 17 May 2018, the Government released a position paper on the Retirement Income Covenant, for public consultation. Public consultation closed on 15 June 2018.
JANA has participated in this public consultation.