COTA has welcomed new Federal Government legislation that will require super funds to more actively support members in generating maximum retirement incomes.
The new legislation will mandate that, by 1 July 2022, all non-self-managed funds develop and publish a retirement income strategy, and implement it under regulatory scrutiny.
According to COTA Chief Executive Ian Yates AM (pictured speaking at the LEADERS SUMMIT 2021), this is an important step towards increasing retirement income in superannuation, as endorsed by the Retirement Income Review.
“While superannuation funds have a responsibility to optimise the ‘nest egg’, they have an equal responsibility to ensure that when the egg is hatched, the funds have products and services that support the optimum quality of life and dignity of their members in their retirement.
“The Retirement Income Covenant focuses on getting funds to rebalance their planning and advice equally on the accumulation and retirement phases, ensuring the system works as it was intended,” he said.
Mr Yates did, however, call the legislation a “missed opportunity” for setting out the purpose of the Superannuation Guarantee as recommended by the Retirement Income Review.
“This legislation builds on the Morrison Government’s recent and welcome introduction of other legislation that will see all workers who earn less than $450 a month from their employer for the first time receive superannuation for every dollar they earn,” he said.
The move follows strong advocacy on COTA’s part for a Retirement Income Covenant.