Chartered Accountants Australia & New Zealand along with joint bodies acknowledge the government’s efforts to shift the focus of Australia’s retirement system from accumulation to income drawdown. However, we do not believe the proposed voluntary best practice principles will effectively support this transition. The principles, alongside the retirement income covenant and the objective of superannuation, adopt a narrow view of retirement needs, excluding non-superannuation assets such as the family home, other income sources, and multiple superannuation interests.

Retirement is inherently complex, the treatment of these complexities in the consultation paper is superficial. We disagree with the assertion that low drawdown behaviour conflicts with the legislated objective of superannuation or leads to poorer outcomes. The legislation does not prescribe how retirees should use their savings or define adequate income levels.

There is no evidence that choosing minimum pension drawdowns results in poorer outcomes.

Retirees must manage finite resources cautiously. There is no evidence that choosing minimum pension drawdowns results in poorer outcomes, nor should retirees be compelled to draw more than necessary. Similarly, retaining superannuation investments at death does not inherently indicate poor retirement outcomes.

Clarification is needed that the principles apply only to registered superannuation entities (RSE)s, are non-binding, and not subject to regulatory oversight. We believe such guidance should be developed collaboratively by industry and regulators. Given recent efforts to comply with the retirement income covenant, RSEs may question the value and cost-effectiveness of adopting these principles.