In response to the Financial System Inquiry, the Government agreed to support the development of more efficient retirement income products. In the Financial System Inquiry, these products were labelled ‘Comprehensive Income Products for Retirement’, or CIPRs.
Since the Financial System Inquiry, the Government has consulted broadly on the best way to support the development of CIPRs. The Government has announced a Retirement Income Framework, intended to increase individuals’ standard of living in retirement, increase the range of retirement income products available, and empower trustees to provide members with an easier transition into retirement. Through this framework, the Government is aiming to increase the efficiency of the superannuation system and focus the superannuation industry on providing income to members in retirement.
In developing the Retirement Income Framework, the Government released a discussion paper for public consultation from 15 December 2016 to 7 July 2017. This discussion paper explored the key issues in developing the framework for CIPRs. To aid policy discussion, the Australian Government Actuary prepared a report on a potential actuarial test as a possible model for regulating CIPRs.
The Government then appointed a consumer and industry advisory group in February 2018, to advise the Government on the scope and possible options for a retirement income covenant. With the benefit of this advice and feedback from broad public consultation, the Government announced two stages of the Retirement Income Framework in the 2018-19 Budget: a retirement income covenant, and the development of standardised, simplified disclosure for retirement income products.
Following these announcements, on 17 May 2018 the Government released a position paper on a retirement income covenant, proposing that trustees of superannuation funds develop a retirement income strategy for their members, develop and offer CIPRs to their members, and provide guidance and information to help their members choose a retirement income product that suits their needs and preferences. Consultation closed on 15 June 2018 and public submissions are available here.
The Government will continue to consult widely as the details of the Retirement Income Framework are developed.
- Retirement Income Covenant position paper [17 May 2018 – 15 June 2018]
Development of the Framework
- Development of the framework for Comprehensive Income Products for Retirement discussion paper [15 December 2016 – 7 July 2017]
Retirement Income Streams
- Treasury – Treasury Laws Amendment (Innovative Superannuation Income Streams) Regulations 2017 [21 March 2017- 12 April 2017]
- Department of Social Services – Social security means testing of retirement income streams[10 February 2017 – 10 March 2017]
- Treasury – Retirement Income Streams Review – final report [May 2016]
- Treasury – Review of retirement income stream regulation (Retirement Income Streams Review) – discussion paper [21 July 2014 – 5 September 2014]
- Australian Government Actuary – Actuarial Certification Test for Comprehensive Income Products for Retirement [29 May 2017]
- Financial System Inquiry – Final Report [7 December 2014]
- Australian Government Actuary – Towards more efficient retirement income products [prepared by the Australian Government Actuary for the Financial System Inquiry – November 2014]