The government has released draft legislation to enshrine the objective of the Australian superannuation system into law, which remains unchanged from its original proposal but has added a requirement to ensure future super policy is consistent with it.
The draft Superannuation (Objective) Bill 2023, which is available from the Treasury website and open for consultation, states the proposed definition will be “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”.
“Legislating an objective of superannuation will provide stability and confidence to policymakers, regulators, industry and the community that changes to superannuation policy will be aligned with the purpose of the superannuation system,” the bill’s explanatory memorandum stated.
“It will also ensure members and funds have more certainty over any future changes to the superannuation system throughout both the accumulation and retirement phases.”
To that end, the explanatory memorandum specified an additional requirement for policymakers to prepare a “compatibility statement” demonstrating how any future legislative changes to the superannuation system align with the proposed aim.
“The intent of the objective bill is to require policymakers to demonstrate to the parliament, and Australians, how any future changes to superannuation law are consistent with the legislated objective,” it stated.
“A statement of compatibility with the objective of superannuation must be prepared for a bill or regulation that relates to superannuation (unless an exception applies) [and the statement] should include consideration of the proposed policy against the key concepts within the objective and a determination on compatibility with the objective as a whole, based on these assessments.”
Further, the bill’s explanatory materials emphasised the purpose of the legislation is not to alter existing laws but to provide direction for the future of Australia’s superannuation system.
“The objective is not intended to change the operation or interpretation of existing superannuation law, prudential standards or governing rules of superannuation entities,” it stated.
“The objective does, however, serve as a reminder to trustees of superannuation entities (which includes all APRA (Australian Prudential Regulation Authority)-regulated superannuation funds, approved deposit funds and pooled superannuation trusts and self-managed superannuation funds) of their role in the superannuation system, including to support members holistically during their working life and through retirement.”
The closing date for submissions is 29 September.