Retirement Income Covenant Exempts SMSFs
The Federal government recently released draft legislation on the Retirement Income Covenant, which revealed it will not apply the covenant’s measures to SMSFs. It is intended that the Retirement Income Covenant will give retirees the confidence to spend their superannuation savings while enabling choice and competition in the retirement phase of superannuation.
The draft legislation would require superannuation trustees to develop a retirement income strategy that outlines how their members will be assisted in retirement. A trustee’s strategy should consider how they will assist members in balancing their retirement income, managing risks, and having flexible access to savings. However, the Federal government has made changes to the implementation of the new legislation, excluding SMSFs from its application.
Section 1.3 of the draft legislation now states that the “covenant does not apply to trustees of self-managed superannuation funds.”
To learn more, please see the full update here – Retirement Income Covenant Exempts SMSFs