Find out how you can stay on track, before it’s too late

Treasury recently released the long-awaited position paper on the Retirement Income Covenant. The proposed Covenant will require all super funds to have a documented strategy to identify the retirement income needs of fund members, and to develop a plan to service those needs, in place before the July 2022 deadline.

 

Given the Covenant will be mandatory for all super funds, find out what this all means and how you can start looking to design and execute on retirement strategies with our easy to use checklist.

Retirement Income Covenant: Position Paper key principles

1. 

Core objectives
  • Maximise retirement income 
  • Manage risks 
  • Have some flexibility

2. 

Data
  • Members balances 
  • Age pension entitlements 
  • Tax implications

3. 

Solutions
  • New products
  • Specific drawdown patterns
  • Specific investment strategies

4. 

Core guidance & advice*
  • Default settings or nudges
  • Guidance including calculators
  • Factual information

*Optional and must abide by existing regulations. The provision of advice on its own does not constitute a retirement income strategy.

Retirement Income Covenant: Position Paper key principles

While the draft wording of the covenant has yet to be released, the Position Paper states that fund trustees must:

Develop a retirement income strategy for all their members, including the possibility of different strategies for different cohorts of members.

Consider the Age Pension and tax implications for their members.

Consider how to assist their members to maximise their retirement income and to manage risks during retirement that may affect their income.

Review their retirement income strategy on a regular basis.


Contact us to find out how Mercer can help you build brighter futures for your members.

 

Tim Jenkins, FIAA
Senior Actuarial Consultant

Emily Barlow
Retirement Income Leader

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