Objective of super enshrined in law

After a decade in the making, an objective of superannuation has been legislated, with the bill passed in parliament yesterday.

Now enshrined in legislation following the passage of the Superannuation (Objective) Bill 2023, the objective of superannuation is "to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way".

The legislated objective comes 32 years after the establishment of compulsory superannuation and the creation of the Superannuation Guarantee and was first recommended by the Financial Systems Inquiry in 2014 and reinforced in the Retirement Income Review of 2020.

Super Members Council chief executive Misha Schubert welcomed the bill's passage, adding that it's appropriate that the wording of the objective reflects Australians' understanding of super.

"Ask everyday Australians what super is for, and they'll tell you it's their money for retirement," she said.

"The 'Objective of Super' legislation reflects that clear and compelling purpose in ironclad law. It will be a guiding light for all future super policy development."

Importantly, the objective safeguards super's primary principle of preservation and makes clear that any attempts to undermine that principle are contrary to the purpose of super, she added.

"We strongly support the legislation. It will help to ensure super stays strong and secure - and continues to deliver a financially secure retirement income stream for millions of everyday Australian retirees," Schubert said.

"An agreed objective of super in law supports more stable, effective and equitable policy settings and reinforces the strong system fundamentals needed to successfully evolve the system."

Reinforcing this, Association of Superannuation Funds of Australia chief executive Mary Delahunty said: "Australians need to know their superannuation is safe from the winds of political change."

"This legislation sends a strong signal that the system will remain focused on delivering for members, now and into the future."

Delahunty also welcomed the legislation's focus on equity and sustainability.

"The objective's focus on equity ensures that superannuation delivers fair outcomes for all Australians, including women and low-income earners, while sustainability guarantees the system can meet the challenges of an ageing population and evolving workforce."

Meantime, Insignia Financial chief executive Scott Hartley said that legislating the objective solidifies the shift in focus of the super system from accumulation to the provision of retirement income, however suggested a rebrand might be required to truly maximise outcomes.

"If we are serious about getting members engaged with their retirement savings sooner, we should rename our system from superannuation to retirement income," Hartley said.

He added that legislating affordable and accessible advice should be treated as a priority "to help more Australians as they approach retirement and improve the advice process by creating efficiencies for comprehensive advisers to help more Australians."