Retirement Income Covenant – Position Paper
The Law Council makes this submission in relation to the proposed introduction of a retirement income covenant for Australian Prudential Regulation Authority (APRA) regulated superannuation trustees (Covenant) as set out in the Department of Treasury’s (Treasury’s) Position Paper of 19 July 2021 (Position Paper).
The Covenant is proposed to be added to the existing suite of statutory covenants applying to APRA regulated superannuation trustees under the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS).
The context and policy purpose of the introduction of the Covenant is expressed as:
The proposed retirement income covenant outlines a pathway to further develop the retirement phase of superannuation. The covenant will place a key obligation on trustees to formulate, review regularly and give effect to a retirement income strategy outlining how they plan to assist their members to balance key retirement income objectives.
The government welcomes feedback and comments on this position paper. Any comments received will feed into the development of legislation to give effect to the retirement income covenant. Subject to the passage of legislation, trustees will be required to have in place a retirement income strategy as outlined in this position paper from 1 July 2022.
The Law Council’s comments are intended to raise issues for consideration by Treasury in the legislative framework of the Covenant and supporting regulatory guidance or mandated requirements in order that the Covenant may be more likely to fulfil its intended purpose and promote the intended behaviour of superannuation providers and members.
You can read the full submissions below.