The Albanese Government is implementing improvements to the superannuation system to help more Australians retire with dignity.
Individuals will now be able to exit certain legacy retirement products that are no longer fit‑for‑purpose and transition to more modern options which better meet their needs.
Following consultation with stakeholders, the regulations that have commenced will:
- remove barriers, to allow individuals to exit these products at any stage over the next five years; and
- help retirees access capital more easily that would otherwise be locked in the system.
These changes are in effect, with the five‑year commutation window closing on 7 December 2029. The more flexible access to reserves will remain as an ongoing improvement to the superannuation system.
As announced by former Government in the 2021–22 Budget, social security treatment will not be preserved for those who choose to transition out of their legacy retirement product. However, no debts will arise from the re‑assessment of these products’ asset values for the period before conversion.
Individuals who want to exit their legacy retirement product should consider seeking financial advice before taking action.
The relevant regulations can be found on the Federal Register of Legislation.