POWERED BY MOMENTUM MEDIA
Treasury to assess super’s role in retirement
Treasury has released a discussion paper on how the superannuation system can provide the needed security and income in retirement.
This discussion paper Retirement Phase of Superannuation increases the focus on the retirement phase by examining:
- Supporting members to navigate the retirement income system
- Supporting funds to deliver better retirement income products and services, and
- Making lifetime income products more accessible.
The number of retirees with a super account is expected to more than doubly over the next 10 years with 2.5 million Australians set to retire but Treasury said they lack access to appropriate products to maximise their super.
Some 84 per cent is held in account-based or allocated pensions, highlighting an opportunity for funds to develop new products. Take up of lifetime income products remains low, it said, and there has been few innovative products come to market.
Treasurer Jim Chalmers said: “While there is recognition of super’s importance in building nest egg savings, there has been less attention on optimising its role in retirement. There’s a clear need for better information, support and well-rounded income products to help retirees make the most of their super.
“Super funds need to do more to understand their members’ retirement needs and provide products and services tailored for their retirement. We also recognise there is a role for government and regulators in creating an environment that supports these changes.
“We want to ensure super delivers on its foundational promise of providing a dignified retirement for more Australians.”
Submissions are open until 9 February.
Responding to the consultation, ASFA interim chief executive, Leeanne Turner, said: "The take up of retirement income products offering protection against the financial consequences of longevity has been modest to date.
"What is needed is the removal of any remaining regulatory barriers to the development of such products.
"Regulatory settings regarding provision of advice and guidance in regard to retirement income products need to be supportive. This includes settings and mechanisms for the gathering of relevant information about the personal circumstances of those approaching retirement. Defaults, nudges and advice only work if the retirement products involved are suitable for their target market and the individuals taking them up."
AUTHOR
Laura Dew
Laura Dew is editor at Super Review. Prior to joining SR, she spent five years working at Investment Week in the UK covering asset and wealth management.
Recommended for you
Speaking to Super Review, the $70 billion fund has unveiled its new solution to address the ‘cognitive load’ of retirement as members enter their golden years.
New research has suggested it’s time to reconsider the home as a fourth pillar of the retirement income system, alongside the age pension, superannuation, and voluntary private savings.
New research has revealed over 60 per cent of retirees believe their super fund offers retirement income products suitable to support their retirement lifestyle.
Some retirees are “needlessly” paying two sets of fees and often more tax than they need to, according to the industry body.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
Spire Oaktree Opportunities XI Second Close
61.07 3 y p.a(%)
2
Spire Oaktree Opportunities XI First Close USD
59.21 3 y p.a(%)
3
DomaCom Lot 21 Chellaston Road Munno Para West SA 5115 Australia
31.73 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
30.15 3 y p.a(%)
5
DomaCom 4/27 Crombie Avenue Bundall QLD 4217 Australia
26.71 3 y p.a(%)
