Treasurer Jim Chalmers announced the reforms at the national conference for the Association of Super Funds of Australia (ASFA) and said they would give retirees more peace of mind, help them make their super go further and provide more support to navigate retirement.
In his address to the conference, Chalmers also said the government was still working on securing support for two key pieces of legislation that are presently before the Senate: enshrining the objective of superannuation and the controversial Better Targeted Superannuation Concessions bill.
“The first [piece of legislation], to enshrine the objective of superannuation into law: ‘to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way’. As I said last year, this is not about changing the objective but elevating it into law with an emphasis on preservation,” he said.
“And the second, to better target super concessions for balances above $3 million. Those with more will still get very generous tax concessions, but slightly less generous.”
The Treasurer said that as the economy changes, the population ages and the super system evolves, more Australians will draw down on bigger pools of savings that they will rely on for longer.
“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. These changes will empower more Australians to make the most of their superannuation through more trusted information, better products and greater transparency,” he said.
The reforms focus on four critical areas to strengthen retirement outcomes:
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Enhanced independent guidance: The government will expand and refresh resources on the Moneysmart website, ensuring retirees have easy access to independent, reliable information on superannuation and retirement options.
ASIC will lead a consumer education campaign to raise awareness amongst people approaching retirement and in retirement. New resources will start rolling out in the first half of 2025.
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Better retirement products: By improving the innovative income stream regulations, the reforms will support innovation in quality retirement products, giving members more options that meet their needs and helping them make the most of their super. The updated regulations will commence from 1 July 2026, with consultation on draft regulations ahead of this.
The changes include allowing funds to offer product features that members want, such as money-back guarantees and instalment payments instead of an upfront lump sum.
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Best practice principles: A new set of voluntary best practice principles will guide the superannuation industry in designing modern, high‑quality income products that support Australians’ financial security in retirement. Consultation on draft principles to begin in 2025.
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Increased transparency: A new reporting framework on retirement outcomes will offer members greater transparency and create common understanding for success in the retirement phase.
Chalmers continued that the new Retirement Reporting Framework will commence in 2027 and enable monitoring of the outcomes delivered to members in retirement consistently and transparently.
APRA will collect and publish data annually to measure progress over time. The design of metrics and processes will be informed by Treasury‑led consultation from next year.
These changes build on the obligations introduced by the Retirement Income Covenant and work in tandem with the government’s Delivering Better Financial Outcomes package.
The government has also tasked APRA and ASIC with undertaking a Pulse Check report by the end of 2025 to monitor trustees’ progress in implementing their strategies under the Retirement Income Covenant. The Pulse Check report would inform the design of the Retirement Reporting Framework.
The Government and Dr Chalmers continue to ignore the feedback from stake holders and simply deflect from the many terrible case study scenario’s that may arise from Div 296. Recently a SMSF auditor illustrated a scenario where the Fund’s investment choices resulted is a paper loss (reduction in market value) or over $10m. The mining stock peaked in value in June 2023 resulting is a unrealised gain of $7.7m. Then in 2024 to stock tanked with a $10m unrealised loss. If Div 293 had been in play, the resulting tax on the Fy2023 unrealised gains would have bankrupted the super fund because it didnt have enough asset left in 2024 to cover the proposed tax. The auditor noted that the Trustee’s would have been liable to the ATO for any tax shortfall!!
We have many instances over the years where share markets peak and crash, leaving investors sitting on large unrealised losses and no means to raise the fund to pay the proposed Div 293.
Terrible legislation in its current form. I dont think many people with balances above $3m would begrudge paying extra tax on their realised earnings, its the unrealised earnings that will cause huge issues.
Go ahead and insist on this outrageous and stupid piece of legislation and you are guaranteed to return to the Opposition Benches in 2025!!
Well again, Chalmers is LYING.
He says – “As I said last year, this is not about changing the objective but elevating it into law with an emphasis on preservation.”
If it has an emphasis on “preservation”, they wouldn’t be stealing it. Oh – they want it stuck in super so that they CAN steal it before you get a chance to use your own life’s savings!
He says – “Those with more will still get very generous tax concessions, but slightly less generous.” They have been given so many cases where the tax paid, once added to the existing 15%, will be well in excess of personal tax rates even with medicare added. This is based on real life examples had the formula been applied in the last 5 years.
LIES, LIES, LIES. It just suits their agenda to lie to get this through.