SMSFs retirement income leaders

The SMSF sector is leading the way with regard to retirement income solutions due to the large number of its members being in retirement or pre-retirement, a senior funds management executive has said.

“The SMSF sector is really leading the whole superannuation industry in the retirement area. If you think about the mainstream APRA (Australian Prudential Regulation Authority)-regulated funds, they have very few people who are actually in pension mode – most of them are in accumulation,” Vanguard Australia head of marketing strategy and communication Robin Bowerman said.

“In the SMSF sector, 36 per cent of the trustees and another 20-odd per cent sitting just behind are already there [managing their retirement income], so with this consultation process around CIPRs (comprehensive income products for retirement) and drawdown policy, the SMSF is actually living it and in fact they’re actually having to do it themselves and work it out.”

Investment Trends chief executive Michael Blomfield pointed out the challenge to find retirement income solutions is potentially becoming more difficult as the concept of retirement continues to evolve.

“One thing we all know is people are retiring earlier than they expect to retire, but they are retiring differently to the way they expected to retire as well,” Blomfield said.

“So they’re working less hours and they’re working less hours before they expected to get there. That drives a whole bunch of social security, drawdown, TTR (transition-to-retirement) issues [with regard to] how they manage this phase, which are questions that are not necessarily as clear and as challenging in the past as they are now.

“It’s actually creating a big challenge for a big group of people.”

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