The Australian Government is making more changes to its $3.9 trillion superannuation industry to strengthen outcomes for the almost 15 million people in the country’s mandatory retirement savings system.
Treasurer Jim Chalmers said the new package of reforms would focus on the retirement phase of superannuation as more than 2.5 million Australians were expected to leave the workforce over the next decade.
He said the focus would be on four key areas:
- enhancing independent guidance by expanding and refreshing resources on the Moneysmart website to give retirees easy access to independent, reliable information on retirement options
- delivering better retirement products by improving the innovative income stream regulations and supporting more innovation in retirement products
- establishing best practice and voluntary principles on retirement products to guide the industry in designing modern, high‑quality retirement products that support Australians’ financial security in retirement, and
- increasing transparency through a new reporting framework for retirement outcomes, offering members greater transparency and create common understanding for success in the retirement phase.
“These changes will empower more Australians to make the most of their superannuation through more trusted information, better products and greater transparency,” Chalmers said in a speech to the Association of Superannuation Funds of Australia conference in Sydney.
He said funds would be allowed to offer features such as money back guarantees and instalment payments instead of an upfront lump sum, and give members more options.
The new Retirement Reporting Framework would commence from 2027, and help monitor outcomes for members in retirement in a consistent and transparent way.
Chalmers said most people retiring within two decades would have been accumulating super at 9% or more each year while they worked, and over the next four decades, super drawdowns were estimated to rise from 2.4% to 5.6% of gross domestic product.
“As our economy changes, population ages and the super system evolves, more and more Australians will draw down on bigger pools of savings, that they will rely on for longer,” he said.
“We are working to ensure there is as much of a policy and product focus on the retirement phase as there is on the accumulation phase.”
The reforms would work in tandem with the Government’s Delivering Better Financial Outcomes package, with consultation on the changes in detail to proceed next year.
The Association of Superannuation Funds of Australia (ASFA) welcomed the government's announcement of reforms aimed at improving retirement outcomes for Australians.
ASFA CEO Mary Delahunty emphasised the importance of these reforms in helping Australians make informed decisions about their retirement.
“Improving consumer education is key to helping Australians make informed decisions about their retirement. Clearer guidance and tools like Moneysmart will empower fund members to engage more actively with their super, ultimately leading to better retirement outcomes. Super funds have shouldered a lot of the responsibility for educating Australians – we welcome an increased effort from the Government in this area because it is so important in helping people make good decisions,” said Delahunty.
Delahunty highlighted the government's commitment to improving consumer education and guidance, which will empower fund members to engage more actively with their superannuation.
Delahunty also noted that these measures build on the Retirement Income Covenant, providing greater confidence in the value that superannuation delivers to Australians.