The term innovative retirement income stream covers a range of lifetime products that did not meet the annuity and pension standards prior to 1 July 2017. There are several key elements that must be met for a retirement product to be considered an innovative income stream. These are;
- similar to an ordinary account-based income stream, the fund is not able to start paying benefits until the individual has met a nil cashing restriction condition of release. However, the difference with these products is that the start date for benefit payments is often deferred 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), and there can be no unreasonable deferral of payments from the income stream
- restrictions on the amount that can be commuted to a lump sum or for rollover purposes, which apply after the income stream is in the retirement phase. The restrictions are based on a declining capital access schedule.