AUSTRALIA - The Commonwealth government is consulting the public on two superannuation policies - the transition to retirement policy and choice of fund regulations - to be introduced in July next year.
The transition to retirement policy, announced in February, will allow people who have not yet retired to access their superannuation in the form of a non-commutable income stream once they reach their preservation age.
“Australians will have the option of retaining a connection with the workforce, rather than retiring prematurely simply to get access to their superannuation,” assistant treasurer and minister for revenue Mal Brough explained.
“For example, a person might choose to continue to work on a part-time basis, and use part of their superannuation to supplement their employment income, instead of retiring from the workforce altogether.”
The consultation document invites feedback on a number of issues including the characteristics of the non-commutable income stream, whether a cap should apply to the amount of super benefits a person can access, whether only part-time employees should have access to the policy and whether it should be compulsory for super funds to offer transition to retirement to members.
“This is an important opportunity for the community to contribute to the design of a more flexible approach to retirement,” Brough added.
The second consultation paper aims to assist in the development of the choice of superannuation fund regulations that will, for the first time, give individuals the opportunity to select the fund in which their employer makes super contributions.
“The choice of fund legislation requires a number of matters to be prescribed in the regulations,” Brough said.
“The government wishes to consult widely on the development of the regulations to ensure that all interested parties have an opportunity to comment.”
The closing date for submissions on the transition to retirement policy is December 10. Submissions on the choice of fund regulations can be made until November 30.
This week's edition of Professional Pensions is out now.
Nearly 60% of UK employers consider defined contribution (DC) master trusts to be the "most suitable" pension fund for their employees, according to research by Buck.
Companies which have tried to dodge their pension duties by changing their identities are being "hunted" by The Pensions Regulator (TPR) in a crackdown on non-compliance with auto-enrolment (AE).
Removing liquidity restrictions would enable DC funds to capitalise on the potentially higher and safer returns that DB schemes have benefitted from, says Patrick Marshall.