The Australian government has announced a package of reforms in response to the feedback received from the "Superannuation in Retirement" consultation, to ensure the superannuation system will better support Australians' needs.
The reforms, unveiled on 20 November, will support Australians in retirement by empowering them to make the most of their superannuation through more trusted information, better products, and greater transparency from funds, according to The Treasury. These reforms will build on the obligations introduced by the Retirement Income Covenant and work in tandem with the government’s “Delivering Better Financial Outcomes” package.
Enhanced independent guidance
The government will expand resources on the Moneysmart website, ensuring retirees have easy access to independent, reliable information on superannuation and retirement options.
• New and updated resources, such as guides and calculators, will help Australians understand key decision points when planning for retirement.
• Updates will include interactive tools to enable testing different ways to draw down superannuation to deliver a secure income stream and explain how that income stream fits with typical expenses in retirement and government support such as the Age Pension. Updated information and tools will be progressively rolled out with the first updates expected to be published on the Moneysmart website in the first half of 2025.
• The Australian Securities and Investments Commission (ASIC) will also undertake a consumer education campaign targeted at Australians approaching retirement and in retirement to boost their engagement with retirement planning.
Better retirement products
Targeted improvements to the existing innovative income stream regulations will support innovation in quality retirement products, giving members more options that meet their needs and helping them make the most of their super.
• These changes will allow funds to offer product features such as money-back guarantees, purchasing in instalments instead of an upfront lump-sum, fairer treatment for couples by taking into account the joint life expectancy where appropriate and clarifying the interaction with the transfer balance cap.
• The government intends to consult industry and other stakeholders before implementing changes to the regulations, which are expected to take effect on 1 July 2026, subject to legislative priorities.
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.
• The principles will articulate the core characteristics of well-rounded retirement products that funds can draw on when developing their product offerings and strategies.
• The best practice principles will work alongside the Retirement Income Covenant and will be voluntary for trustees to apply to their product offerings, providing guidelines for quality superannuation products in retirement.
• The principles will be developed by Treasury, in consultation with an industry working group and the broader community. Draft principles will be released for public consultation next year.
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.
• The Australian Prudential Regulation Authority (APRA) will collect and publish data on an annual basis, so progress can be measured over time. The design of metrics and the process will be informed through a Treasury-led public consultation from next year.
• The government has also tasked APRA and ASIC with undertaking another Pulse Check report by the end of 2025, to continue monitoring trustees’ progress in implementing their retirement income strategies, consistent with their obligations under the retirement income covenant. The Pulse Check will also inform the design of the Retirement Reporting Framework.
Life insurers’ response
The Council of Australian Life Insurers (CALI) says it welcomes the move to improve the retirement phase of superannuation.
“This is a big win, especially for the five million people who are currently in, or preparing for, retirement,” said CALI CEO Christine Cupitt.
“Australia’s life insurers have long been pushing for these improvements because they’re critical to helping people make the right decisions for them about how to finance their retirement.”