Retirement Income Covenant passes into law1 min read
It’s been in the making for many years and it’s finally here. The new super legislation, called the Retirement Income Covenant recently got passed in parliament.
Put very simply, it’s a law that requires trustees of super funds to have in place a retirement income strategy to help members improve their retirement outcomes. The plan needs to be in place by 1 July 2022, while its implementation can come later.
The Covenant requires trustees to outline how they plan to help members balance or ‘trade-off’ the following objectives:
- maximise their retirement income
- manage risks (such as longevity and investment risks) to their retirement income
- have some flexible access to savings during retirement.
In developing their strategic plan, trustees are required to reflect on their own membership and identify member retirement income needs.
Why should you be interested? Retirement income is key to a great life after work – it can determine what kind of life you live in retirement, how confident you can be in spending your savings and what choices are available to you. Any industry-wide improvements in this space will ultimately be of benefit to your life in retirement.
More on this as we work through our approach, so watch this space!
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