Highlighting these developments, Financial Services Minister Daniel Mulino and Treasurer Jim Chalmers emphasised the urgency brought about by an aging population and the evolving superannuation system. With more than 2.5 million Australians expected to retire in the next ten years, there is an imperative need for larger savings to support longer lifespans.
The proposed principles aim to steer the superannuation industry towards crafting modern, high-quality retirement products that secure income during retirement. Accompanying this, the retirement reporting framework seeks to enhance transparency and foster a common understanding of the retirement phase among super fund members.
Blake Briggs, CEO of the Financial Services Council (FSC), welcomed the consultation papers, underscoring the necessity for personalised retirement outcomes. Briggs advocates for a retirement policy that empowers individuals through access to guidance, financial advice, and a diverse array of products tailored to different retirement aspirations.
The consultation papers delineate a vision for improved individual outcomes, aligned with the overarching Delivering Better Financial Outcomes (DBFO) reforms. They propose clear legislative rules for trustees to enable more relevant services to members in retirement, particularly in terms of what advice can be collectively funded through superannuation.
Moreover, the papers highlight the complex nature of servicing advised members owing to their customised financial plans. Nonetheless, there is guidance for trustees to ensure their range of products and settings align with the diverse needs of their members.
The FSC has also warned against the broad application of performance testing to retirement products, critiquing its potential to generate unsatisfactory outcomes. Given the personal nature of retirement, such testing could lead to inappropriate standardization across varied investment portfolios.
