On 23 February 2026, the Australian Treasury issued guidance on best practice principles for superannuation retirement income solutions (the Principles).

Background

Registrable superannuation entities (trustees) have a legal obligation under the Retirement Income Covenant (Covenant) to have a retirement income strategy that assists members in and approaching retirement to maximise expected retirement income, manage expected risks, and have flexible access to expected funds. The Covenant operates alongside broader trustee obligations in the Superannuation Industry (Supervision) Act 1993 (Cth), prudential standards and other relevant guidance.

Principles

The Principles give non-binding guidance to trustees about how they can better design and deliver fit-for-purpose retirement income solutions for their members under their retirement income strategy.

The Principles support trustees in their considerations of how to:

  • Deepen understanding of their membership and their retirement income needs, to support the design of quality retirement income solutions, guidance services and engagement strategies.
  • Design a robust suite of products and product settings that allow trustees and members to build quality retirement income solutions.
  • Combine products and product settings to construct retirement income solutions appropriate for identified cohorts.
  • Foster member engagement in retirement to support informed choice and improved retirement outcomes.
  • Review and improve their trustee-designed retirement income solutions.

Understanding members’ retirement income needs

The Principles state that that the best practice for understanding members’ retirement income needs means a trustee will:

  • Undertake regular research to ensure an up-to-date of the composition of its membership base.
  • Use accessible data and behavioural research to inform the design of information and engagement strategies.
  • Improve understanding of the membership base.
  • Develop at least three cohorts that reflect the composition of the membership at or approaching retirement to inform the design of retirement income solutions.

Designing the elements of a quality retirement income solution

The Principles state that best practice for designing the products and product settings to build quality retirement income solutions means a trustee will: 

  • Provide their members with access to a lifetime income product that is not the Age Pension, an account-based pension and lump sums.
  • Design product settings that allow for the construction of retirement income solutions that meet members’ retirement income needs.
  • Allow all members that meet a relevant condition of release access to a retirement income solution that includes an account-based pension component, irrespective of account balance.
  • Ensure these products and product settings can be used to construct both trustee-designed retirement solutions and allow members to tailor their own retirement income solution.

Constructing retirement income solutions that meet members’ needs

  • The Principles state that best practice for constructing retirement income solutions that meet members retirement income needs means a trustee will:
  • Construct a separate trustee-designed retirement income solution for each identified cohort, that balances members’ needs to maximise expected retirement income and maintain flexible access to capital.
  • Ensure each trustee-designed retirement income solution is broadly calibrated to the financial characteristics of a retiree cohort.
  • Design guidance services that assist members to understand select the components of their retirement income solution.

Supporting member engagement with retirement income solutions

  • The Principles state that best practice for supporting members to choose a retirement income solution means a trustee will:
  • Support all members to understand their retirement income needs by providing forecasting.
  • Foster member engagement during the accumulation phase.
  • Engage with members approaching retirement to provide information on retirement products.

Review and improve

Finally, the Principles state that best practice for review of its retiree cohorts and trustee-designed retirement income solutions means that a trustee will:

  • Assess the effectiveness of its trustee-designed retirement income solutions in meeting the needs of its cohorts and consider relevant data on measurable outcomes, usage, and member behaviour to improve the quality of its retirement income solution offerings.
  • Assess the effectiveness of guidance services and engagement strategies in supporting members to navigate their retirement income solution choice and collect relevant data on member experiences.
  • Have regard to the changing needs of members approaching retirement (over the short and medium term) when assessing the ongoing settings of trustee-designed retirement income solutions.

Next steps

The Australian Prudential Regulation Authority and Australian Securities and Investments Commission will continue to monitor compliance with existing trustee obligations.