Retirement Essentials congratulates the Australian Government on its 20 November announcement that it will take action to reform the retirement phase of superannuation to deliver a better retirement for all Australians.
Such reforms are 100% aligned with Retirement Essentials activities which include:
- Providing reliable information on superannuation and retirement options
- Helping retirees to make their own super savings go further.
These actions deliver increased peace of mind as retirees navigate their individual retirement journeys.
We have published the full Australian Government announcement below for those interested to learn more about the detail of these proposed reforms.
20 November 2024
Improving the retirement phase of superannuation
Joint media release from The Hon Jim Chalmers, Treasurer and The Hon Stephen Jones MP, Assistant Treasurer and Minister for Financial Services
‘The Albanese Government is taking action to reform the retirement phase of superannuation so the system delivers a better retirement for more Australians.
Our reforms will give retirees more peace of mind, help them make their super go further and provide more support to navigate retirement.
‘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.
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 9 per cent or more annually for the duration of their working lives.
‘We are working to ensure there is as much of a policy and product focus on the retirement phase as there is on the accumulation phase.
These changes will empower more Australians to make the most of their superannuation through more trusted information, better products and greater transparency.
They will help ensure super delivers on its foundational promise of providing a dignified retirement for more Australians.
‘Our reforms focus on four critical areas to strengthen retirement outcomes:
- Enhanced independent guidance: The Government will expand and refresh resources on the Moneysmart website, ensuring retirees have easy access to independent, reliable information on superannuation 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.
- Better retirement products: By improving the innovative income stream regulations, the reforms will support innovation in quality retirement products, giving members more options that meet their needs and helping them make the most of their super. The updated regulations will commence from 1 July 2026, with consultation on draft regulations ahead of this.
The changes include allowing funds to offer product features that members want, such as money back guarantees and instalment payments instead of an upfront lump sum.
- Best practice principles: A new set of voluntary best practice principles will guide the superannuation industry in designing modern, high-quality income products that support Australians’ financial security in retirement. Consultation on draft principles to begin in 2025.
- Increased transparency: A new reporting framework on retirement outcomes will offer members greater transparency and create common understanding for success in the retirement phase.
‘The new Retirement Reporting Framework will commence from 2027 and enable monitoring of the outcomes delivered to members in retirement in a consistent and transparent way.
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.
‘These changes build on the obligations introduced by the Retirement Income Covenant and work in tandem with the Government’s Delivering Better Financial Outcomes package.
The Government has also tasked APRA and ASIC with undertaking a Pulse Check report by the end of 2025, to monitor trustees’ progress in implementing their strategies under the Retirement Income Covenant. The Pulse Check will inform the design of the Retirement Reporting Framework.
Further consultation with the industry and broader community on the details of these changes will begin in the first half of 2025.’More information on these reforms is published on the Treasury website.
At present there is apparently a shortage of nursing homes across all categories of accommodation. This means that whether you qualify for full Government support or are able to contribute anywhere throughout the range up to full payment, you may not be able to find any vacancies. You expect to receive incentives to remain in your own home but what if you don’t own one?
The announcement doesn’t seem to address what incentives are expected to address making Nursing Homes a viable and attractive business to commercial enterprise.