The Financial Services Council (FSC) has welcomed the release of the federal government’s consultations related to Best Practice Principles for Retirement and the Reporting Framework for Retirement Data.
The industry has until 18 September to make submissions on the “Guidance on best practice principles for superannuation retirement income solutions” paper and until 5 September to make submissions on the “Retirement Reporting Framework: Increasing transparency for members” paper.
The FSC acknowledged the two papers were important steps, but urged the government to ensure individual outcomes remain the focus of national retirement policy.
“No two people’s retirements are the same and should not be treated as such by the government or superannuation funds. Retirement policy should focus on ensuring that people are given the tools to make decisions that steer them towards the kind of retirement that they want. This includes access to guidance, financial advice and a range of products to help shape their futures,” FSC chief executive Blake Briggs noted.
To this end, the industry body called on Canberra to continue maintaining its focus on individual outcomes to ensure Australians have choice when it comes to their superannuation. It also cautioned the government about using collected data to extend the annual performance test to the retirement phase.
It described product comparisons in retirement as a “fraught endeavour” because of the significant differences between individual investment portfolios depending on people’s retirement goals.
“Performance testing of retirement products would lead to adverse outcomes, given that retirement is personal and should not be treated uniformly,” Briggs explained.
In the consultation papers, the government indicates the retirement reporting framework will require registrable superannuation entity licensees (trustees) to report annually on a “series of indicators on their products, services and offerings, as well as metrics on their members’ behaviour, to understand how trustees are driving improved retirement outcomes”.
