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FSI urged to focus on post-retirement
The Financial Systems Inquiry (FSI) should focus on superannuation in the post-retirement phase, according to a new submission filed by the universities-based ARC Centre of Excellence in Population Research (CEPAR).
The submission has called on the inquiry panel to take into account the rapid expansion of Australia's post-age 65 population which is expected to reach 7.2 million by 2050.
CEPAR director, professor John Piggott said that it was in these circumstances that policy makers, product providers and regulators needed to get to grips with the issue as quickly as possible.
"The absence of options to access superannuation savings as gradual income forces the lump-sum culture on people who may not want it," he said, arguing that the Government rank the risk of being forced to further subsidise retirement incomes if it did not provide options.
"We know people who retire early may not have as much money as they anticipated," Piggott said. "When the lump-sum runs out, they revert to the pension system or try to re-enter the workforce."
He said it was time these issues were examined systemically and that the FSI process presented a good opportunity.
Among the recommendations contained in the CEPAR submission are that a menu of retirement income products should be available to retirees along with consideration being given to the structures that need to be put in place to facilitate individual choice if a suite of products were to enter the market.
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Superannuation funds will have two options for charging fees for the advice provided by the new class of adviser.
The proposed reforms have been described as a key step towards delivering better products and retirement experiences for members, with many noting financial advice remains the “urgent missing piece” of the puzzle.
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