FSC rebukes ‘one-size-fits-all’ retirement scheme amid building government distrust

20 February 2024

| By Jessica Penny |

The majority (87 per cent) of Australians trust themselves over the government to decide which retirement products to use, new research by C|T Group has shown.

The research, conducted on behalf of the Financial Services Council (FSC), has revealed a significant desire from Australians to have autonomy over how they spend and enjoy their retirement.

On the other side of the coin, this has garnered a lack of trust in the government’s ability to be able to direct how superannuation savings should be consumed.

Namely, a poll consisting of 2,500 Australians across the country showed that, when faced with the choice between the government and super funds, most voters (73 per cent) would rather their super funds make decisions on which retirement products they will use.

The findings came on the back of Treasury’s discussion paper, Retirement Phase of Superannuation, released in December, outlining how the superannuation system can provide members with the needed security and income in retirement, with an increased focus on the retirement phase.

Importantly, this included a potential to default people into retirement products and a standardised product that superannuation funds would have to offer their customers in the first instance.

As such, FSC chief executive Blake Briggs said that Treasurer Jim Chalmers “should be careful” not to default superannuation consumers into government-designed retirement products if C|T Group’s latest findings are anything to go off.

“There is significant risk for the government if they were to try and convince Australians that politicians know best determining which retirement products they should use,” Briggs said.

A majority of Australians aged 45–55, who have saved through superannuation throughout their careers and stand to be impacted by proposed changes, expressed a preference for greater control over their retirement savings rather than relying on a standardised retirement product.

Briggs said that these findings offer a “cautionary warning” to super funds that are contemplating whether to implement a “one-size fits all” solution for their members.

“Retirement is complex, and every family is unique, making affordable and accessible personal financial advice that tailors retirement outcomes for each household the key to delivering high-quality retirement outcomes,” Briggs concluded.