Deferred lifetime annuities must be placed high on the new Government’s agenda if it wants to lessen the impact of longevity risk, the Actuaries Institute believes.
In a pre-Budget submission, the professional body called on the Federal Government to open the door for product innovation by removing barriers in the longevity risk space.
“The current limited range of income products that pool longevity risk, including the unavailability of pure longevity protection in the form of a deferred lifetime annuity (DLA) and other guaranteed retirement income products, is a major consumer issue for the growing number of baby boomers who are retiring each year,” the submission said.
It also called for the Government to incentivise income stream superannuation products to reduce the likelihood of retirees running out of lump sum super and using the pension as a fallback.
“In particular, retirees should be incentivised to protect themselves against their own longevity,” it said.
As a further measure, the institute said the pension age should be further lifted in line with rises in life expectancy.
In addition, legislative barriers preventing older Australians from staying in the workforce should be removed, it said.
