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Expanding intra-fund advice will improve member retirement outcomes: AIST

The Government’s proposed Retirement Income Covenant should include provisions to expand intra-fund advice for super fund members, the Australian Institute of Superannuation Trustees (AIST) said today.

Releasing its latest submission on the Retirement Income Covenant, AIST CEO Eva Scheerlinck said expanding intra-fund advice so that super funds could provide advice on issues such as a couple’s retirement adequacy and age-pension eligibility would lead to better retirement outcomes.

“Decisions about retirement income options can be among the most important super fund members will ever make,” Ms Scheerlinck said. “Expanding intra fund advice alongside the proposal for funds to develop a retirement income strategy would help ensure that members are provided with the most appropriate approach to their retirement income needs.”

Currently, there are strict limitations on the scope of the intra-fund advice provided by super funds. Super funds are not permitted to provide intra-fund advice on a household’s retirement adequacy, home ownership and other non-superannuation assets.

“We need to recognise that as many as half of all members seek pre-retirement advice as a couple or household rather than as individuals” Ms Scheerlinck said. “Allowing super funds to provide intra-fund advice on factors such as household assets and home-ownership is a natural fit with the retirement income covenant proposal.”

“Over many years intra-fund advice has provided limited advice very widely and successfully and expanding it to a broader range of retirement questions has the potential to benefit millions of Australians,” Ms Scheerlinck added.

AIST’s submission also recommends:

  • a data-sharing arrangement with Government agencies to facilitate implementation;
  • safe harbour protections for super funds;
  • Examination of the appropriateness of standardised labelling;
  • special consideration for Indigenous peoples;
  • Retirees to continue to have flexible access to their savings (including lump sums)

Enquiries: Janet de Silva, AIST Senior Media Manager [email protected] 0448 000 499

AIST is the peak body for the $1.5 trillion profit-to-member superannuation sector which includes industry, corporate and public-sector funds.