Well how about that for timing? Treasury has just released two consultation papers on key elements of the retirement reforms announced by Treasurer Jim Chalmers late last year:
- The best practice principles for superannuation retirement income solutions (the "principles").
- The retirement reporting framework (the "framework").
The "principles" and the "framework" will no doubt be studied carefully in the coming weeks, however an early read tends to indicate that, for a trustee to be exhibiting better practice, it will:
- Need to offer an account-based pension and a lifetime income product,
- Design retirement income solutions for member cohorts, while still allowing tailoring at an individual level; and
- Design guidance services that assist members to understand and select the components of their retirement income solution based on their preferences, for example through personas or assisted choice tools.
The trustee-designed solutions should be broadly calibrated to the financials of a particular retiree cohort, consider the Age Pension, and help that cohort to balance its retirement objectives.
If this all sounds familiar, it's because the Deloitte Retirement Trilemma is similarly designed on an evidence-based approach to the construction of trustee-designed retirement solutions – being a precise combination of calibrated products.
The good news is trustees can start implementing these concepts today, as the purpose of these consultations is simply to build upon the Retirement Income Covenant obligations that already exist.