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Legislating the objective of super – consultation paper released
Article published on: 20-02-2023
The Government has released their consultation paper ‘Legislating the objective of superannuation’.
The paper provides a proposed objective of super for industry consideration, which seeks to answer:
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the purpose of super
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how super delivers on its purpose, and
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the place of super in the broader retirement income system.
The proposed objective is:
‘The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way’.
The paper does not make any specific recommendations for changes to any of the existing super rules, including any super account balance caps.
What is covered in the consultation paper?
The consultation paper:
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highlights the importance of super in supporting retirement, with 78% of Australians estimated to have funds in super currently
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provides context about the history of Australia’s super system
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provides the reasoning and benefit of formally legislating the objective of super in respect of future super policy, by ensuring ‘transparency and accountability’ in policy development
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highlights the benefit of increasing the focus on super as an asset to drawdown to deliver income in retirement, as opposed to a vehicle for asset accumulation
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reflects upon previous super reviews, reports and recommendations, including the 2014 Financial System Inquiry and the 2020 Retirement Income Review, which resulted in draft legislation seeking to formalise an objective of super, which subsequently lapsed
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defines the meaning for this purpose, of key terms including ’preserve savings’, ‘deliver income’, and ‘sustainable’, and
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specifies that the objective will be forward looking and will not impact trustee obligations (it will be separate from the sole purpose test and best financial interests duty).
Industry feedback
The Government is seeking feedback from industry stakeholders in relation to how the objective should be framed, the potential benefits and risks of the objective, and practical considerations. Submissions can be made up until 31 March 2023. See treasury.gov.au for more information. | |
