FPA welcomes passage of the retirement income covenant
The Financial Planning Association of Australia (FPA) welcomes today’s passage through the Australian Parliament of the Corporate Collective Investment Vehicle Framework and Other Measurers Bill 2021, which legislates for a new retirement income covenant.
FPA Chief Executive Officer Sarah Abood said, “This legislation establishes requirements for trustees to outline to members how their superannuation fund’s retirement income strategy will assist them in their retirement.”
“This is an important improvement on the current legal obligations for super funds, which have to date been mainly focused on the accumulation phase of members rather than their retirement.
“On behalf of its members, the FPA has been long calling for new retirement income products to be developed for Australian retirees which allow them to select the best options to suit their unique retirement needs. The ‘one size fits all’ approach in the system has limited the ability for retirees to mix income, lump sum, longevity and market risks adequately. Given these changes, financial planners now look forward to their clients having the ability to access a broader range of options.
“We also welcome the additional clarification and certainty provided by Parliament on time frames for time critical advice provision which ends a long debate over the definition of “days”.
“Overall these changes will help provide certainty and confidence to retirees as more and more Australians begin planning for this next stage of life.
“The FPA appreciates the bi-partisan support which led to the passage of this legislation and looks forward to its commencement on 1 July 2022,” Ms Abood said.