Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) A retirement income strategy formulated for an entity by a trustee for the purposes of subsection 52(8A) must meet the requirements in this section.
(2) The strategy must be for the benefit of beneficiaries of the entity who are retired or who are approaching retirement and must address how the trustee will assist those beneficiaries to achieve and balance the following objectives:
(a) to maximise expected retirement income over the period of retirement;
(b) to manage expected risks to the sustainability and stability of retirement income over the period of retirement of the following kinds:
(i) longevity risks;
(ii) investment risks;
(iii) inflation risks;
(iv) any other risks to the sustainability and stability of the retirement income;
(c) to have flexible access to expected funds over the period of retirement.
Determining the class of beneficiaries who are retired or who are approaching retirement
(3) The trustee must determine the class of beneficiaries of the entity who are retired or who are approaching retirement for the purposes of the strategy. The class may be determined excluding beneficiaries who:
(a) only hold a defined benefit interest in the entity; and
(b) are not eligible to commute that benefit (whether during the period of retirement or otherwise).
(4) The strategy may divide the class of beneficiaries into sub - classes and make different provision in respect of those sub - classes.
Determining meaning of retirement income and period of retirement
(5) The trustee must determine the meaning of retirement income for the purposes of the strategy, which:
(a) must include income, net of tax, received during the period of retirement of the following kinds:
(i) income paid from, or supported by, a superannuation interest in the entity;
(ii) income from an age pension under the Social Security Act 1991 ; and
(b) may include income from any other source if the trustee determines that it is appropriate to include income from that source.
(6) The trustee must determine the meaning of period of retirement for the purposes of the strategy.