The Australian superannuation industry is expected to provide its participants with more “innovative” income products as the government pushes to reform the retirement phase of superannuation, Jim Chalmers, treasurer of Australia, said on Nov. 20.
Within the next decade, over 2.5 million Australians are expected to retire, and within the following decade, most retirees will have accumulated superannuation at 9% or more annually during their working lives, he said in a pre-recorded speech at the Association of Superannuation Funds of Australia conference in Sydney.
By 2064, drawdowns from supers are estimated to rise to 5.6% of gross domestic product from 2.4% of GDP, he said.
“This is part of the big demographic shifts shaping our economy… 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,” he added.
The government identified four areas on which the retirement reforms will focus, including an education campaign for people in and approaching retirement, updated regulations that “support innovation” in retirement products, a new set of best practice principles for “high-quality income products,” and a more transparent reporting framework.
The updated regulations will allow superannuation funds to introduce product features such as moneyback guarantees and installment payments over lumpsum payouts, Chalmers wrote in a statement released in conjunction with the speech. Consultation on draft regulations will be conducted ahead of their commencement, which takes place on July 1, 2026.
Consultation on draft best practice principles will also be conducted in 2025, the statement said.
A new retirement reporting framework will come into effect in 2027 and will be designed to provide greater transparency around the retirement phase of superannuation.
The Australian Prudential Regulation Authority will collect and publish data annually to measure progress. A treasury-led consultation will inform the design of metrics and processes in 2025, the statement said.
“These reforms will work in tandem with the government’s ‘Delivering Better Financial Outcomes’ package. We will consult on the changes in detail next year,” Chalmers said in his speech.
