The Government committed to introduce a retirement income covenant for superannuation trustees (including trustee for SMSF and SAF) in the 2018-19 Budget and has now released a position paper on 19 July 2021.

The position paper states the intention to include a retirement income covenant in the Superannuation Industry (Supervision) Act 1993 which outlines a fundamental obligation of trustees to formulate, review regularly and give effect to a retirement income strategy.

The retirement income strategy will outline the trustee’s plan to assist their members to achieve and balance the following objectives:

  • maximise their member’s retirement income;
  • manage risks to the sustainability and stability of their retirement income; and
  • provide some flexible access to savings during retirement.

The paper also highlights that retirees struggle to develop effective income strategies on their own and that much of their savings within the superannuation system are not used to provide an adequate retirement income.  As a result, the covenant aims to improve these mechanisms by creating an obligation for superannuation trustees to assist their members to meet key retirement income goals.

Consultation is open until 6 August 2021 and the Government aims to have the changes come into effect from 1 July 2022.


Further information

Treasury of Australia, Position paper, 19 July 2021

Additional information

Macquarie Investment Management Limited ABN 66 002 867 003 AFSL 237 492 RSEL L0001281 (MIML) is the operator of Macquarie Investment Manager, Macquarie Investment Manager II, Macquarie Investment Consolidator, Macquarie Investment Consolidator II and Macquarie Investment Accumulator; and is the Trustee of the Macquarie Superannuation Plan.

This information is provided for the use of licensed and accredited brokers and financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products.

The information on this page does not take into account your objectives, financial situation or needs. Before making any financial investment decision or a decision about whether to acquire a product mentioned on this page, a person should obtain and review the terms and conditions relating to that product and also seek independent financial, legal and taxation advice.

Unless stated otherwise, this information has been prepared by Macquarie Bank Limited AFSL and Australian Credit Licence 237502. It is provided for the use of licensed and accredited brokers and financial advisers only. In no circumstances is it to be used by a potential client for the purposes of making a decision about a financial product or class of products.