APRA and ASIC have issued a joint letter to registrable superannuation entity (RSE) licensees setting out their expectations on the implementation of the retirement income covenant. The letter follows recent amendments to the SIS Act which require RSE licensees to formulate a retirement income strategy and publish a summary of the strategy on the entity’s website by 1 July 2022.
APRA and ASIC said they do not intend to issue detailed guidance on how RSE licensees should implement the covenant. Rather, implementation of the strategy is expected to be subject to a “continuous improvement process” from 1 July 2022 onwards. The letter outlines an indicative implementation pathway for RSE licensees to consider when embedding the covenant into their business operations. It also sets out considerations that a prudent RSE licensee would consider in order to develop an effective retirement income strategy.
[Source: APRA media release, 7 March 2022; LTN 43, 7/3/22]
[Tax Month – March 2022 – Previous Month, 8.3.22]