Senate inquiry puts retirement system under scrutiny

The Senate Economics Reference Committee has referred an inquiry into improving the Australian retirement system.

The inquiry Improving consumers experience, choice and outcomes in Australia’s retirement system will report by 30 June 2024. 

Its term of reference states it will cover:

• Regulatory and tax impediments to innovation and uptake of insurance products in retirement
• The economic costs and opportunities of innovation in our retirement income system
• The interaction of health insurance, life insurance, general insurance, and social security supports to retirement outcomes, including options to improve incentives that drive consumer outcomes and support the sustainability of the retirement income system
• The potential role of FinTech platforms, technologies, and innovations in supporting better retirement outcomes
• Policy options to support greater choice and quality of life in the retirement income system, including but not limited to the aged pension, financial advice, home ownership and downsizing, and insurance
• Progress on implementing the Retirement Income Covenant 
• The impact of climate change on insurance premium affordability and accessibility
• The impact that climate change is likely to have on insurance premiums for products including life, home and contents and small business
• The impact of climate change on the value of assets (e.g., houses, investments) of retired people.

A statement from Senator Andrew Bragg, chair of the committee, highlighted the focus on insurance in super and aged care. 

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“The 2023 Intergenerational Report projects a 70 per cent increase in per capita expenditure on aged care over the next 40 years. Our inquiry will examine the merits of an aged care insurance product to futureproof our aged care system. 

“In addition, the Inquiry will examine how to improve customer experiences and choice in insurance. 

“Over the last 12 months, complaints about death benefits offered by super funds rose by 136 per cent. There is a systemic problem with these products, which the government has failed to address.”