The federal government has released a position paper on the Retirement Income Covenant.
Now open for public consultation, the government claims the covenant is an important step in the development of the retirement phase of superannuation.
“The covenant will codify the requirements and obligations for superannuation trustees to improve retirement outcomes for individuals, while enabling choice and competition in the retirement phase,” a statement released on Monday read.
“In doing so, the covenant will address a key finding of the Retirement Income Review, which highlighted the opportunity to increase retirees’ standards of living by improving their use of superannuation assets in retirement.”
The Retirement Income Covenant will require trustees to develop a retirement income strategy for members and to provide guidance. It was proposed in 2018 and scheduled to roll out in 2020, before the legislation process was delayed through COVID-19.
All industry stakeholders are encouraged to provide input on the consultation paper, with submissions to close on 6 August.
Subject to the passage of legislation, the covenant is expected to commence from 1 July 2022.
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