Challenger defends covenant and CIPRs

challenger/AFA/CIPRs/FPA/

22 June 2018
| By Mike |
image
image image
expand image

Challenger Limited has run counter to both the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA) in backing Federal Treasury proposals for the introduction of a retirement income covenant and comprehensive income products in retirement (CIPRs) largely based on annuities.

While both the FPA and the AFA have argued against a one-size-fits-all approach and suggested that a covenant will not trump the delivery of good advice, Challenger has argued that the superannuation system is not yet up to delivering on the next phase – retirement.

“Challenger supports a Treasury proposal to introduce a covenant in the superannuation laws to ensure the legislative arrangements for the retirement phase of super keep pace with the size and importance of the system,” the company said.

“It backs the approach of developing the covenant ahead of the other regulatory measures needed to implement the retirement income framework because setting appropriate standards that place emphasis on the needs of members in retirement is a critical first step.”

Challenger said the Treasury proposal that superannuation funds assist older members by developing a retirement income strategy for the fund would plug a significant gap in the Superannuation Industry (Supervision) Act because, currently, retiring members do not have the benefit of such a provision and neither do fund trustees.

Challenger’s chairman, Retirement Income, Jeremy Cooper said that the CIPR proposal was not a revolutionary change, but a necessary enhancement for a system that will have $1.3 trillion heading toward retirement by 2030.

 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 5 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 1 day ago

ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay....

2 days 16 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5