As Australia’s population ages, Australians longer life expectancies, and the superannuation system matures, demands placed on the superannuation system to deliver income throughout retirement will increase. The retirement phase of superannuation is currently underdeveloped and could better meet both the income and risk management needs of many individuals and the objective of the superannuation system. A well-developed, efficient retirement phase will lift the standard of living of individuals in retirement, and in doing so better achieve the proposed objective of the superannuation system, which is to provide income in retirement to substitute or supplement the Age Pension. This paper explores a potential framework for the development and offering of Comprehensive Income Products for Retirement, or CIPRs. This framework envisages a greater role for trustees in guiding their members at retirement in a mature superannuation system. Feedback to assist the development of the CIPRs framework is sought on the following: the structure and minimum requirements of CIPRs; the framework for regulating CIPRs; and the offering of a CIPR. A (CIPR)? It is envisaged that a CIPR be a mass-customised, composite retirement income product (for example, combining a pooled product with a product that provides flexibility), which trustees could choose to offer to their members at retirement. The offering of a CIPR would provide an to help guide individuals in their retirement income ‘anchor’ decision-making. Importantly, an individual would have the freedom to choose whether to take up the CIPR or take their retirement income benefits in another way. Under the CIPRs framework although different product providers (for example, life insurance companies) could administer the underlying component products, trustees would offer a single income stream to their members. If a trustee designs a product that: meets the proposed minimum product requirements; is in the best interests of the majority of their members; and offers the product in line with the offering requirements, it is proposed that the trustee will receive a safe harbour. The safe harbour would protect the trustee from a claim on the basis that the CIPR was not in the best interest of an individual member. This is intended to provide legal certainty for trustees in undertaking the CIPR offering.
As Australia’s population ages, Australians longer life expectancies, and the superannuation system matures, demands placed on the superannuation system to deliver income throughout retirement will increase. The retirement phase of superannuation is currently underdeveloped and could better meet both the income and risk management needs of many individuals and the objective of the superannuation system. A well-developed, efficient retirement phase will lift the standard of living of individuals in retirement, and in doing so better achieve the proposed objective of the superannuation system, which is to provide income in retirement to substitute or supplement the Age Pension. This paper explores a potential framework for the development and offering of Comprehensive Income Products for Retirement, or CIPRs. This framework envisages a greater role for trustees in guiding their members at retirement in a mature superannuation system. Feedback to assist the development of the CIPRs framework is sought on the following: the structure and minimum requirements of CIPRs; the framework for regulating CIPRs; and the offering of a CIPR. (CIPR)? It is envisaged that a CIPR be a mass-customised, composite retirement income product (for example, combining a pooled product with a product that provides flexibility), which trustees could choose to offer to their members at retirement. The offering of a CIPR would provide an ‘anchor’ to help guide individuals in their retirement income decision-making. Importantly, an individual would have the freedom to choose whether to take up the CIPR or take their retirement income benefits in another way. Under the CIPRs framework although different product providers (for example, life insurance companies) could administer the underlying component products, trustees would offer a single income stream to their members. If a trustee designs a product that: meets the proposed minimum product requirements; is in the best interests of the majority of their members; and offers the product in line with the offering requirements, it is proposed that the trustee will receive a safe harbour. The safe harbour would protect the trustee from a claim on the basis that the CIPR was not in the best interest of an individual member. This is intended to provide legal certainty for trustees in undertaking the CIPR offering. A