The term innovative retirement income stream covers a range of lifetime products that didn't meet the annuity and pension standards prior to 1 July 2017. A retirement product qualifies as an innovative income stream only when it meets the following key elements:
- Similar to an ordinary account-based income stream, the fund can't start paying benefits until the individual has met a nil cashing restriction condition of release. However, these products differ because they delay benefit payments until a later event, usually age-related. This is built into the terms and conditions of the product.
- Once payments start, they must be made at least annually and be payable for the individual's remaining lifetime (and any primary or reversionary beneficiaries). There can be no unreasonable deferral of payments from the income stream.
- Rules restrict the amount you can commute to a lump sum or rollover, after the income stream enters the retirement phase. The restrictions are based on a declining capital access schedule.
For general information, refer to Income streams (pensions).