Super decumulation is a live debate in Australia and policies formulated in the next few years will set the stage for the issue here, according to academics.
A new set of research briefs released by the ARC Centre of Excellence in Population Ageing Research (CEPAR) said while there has been much focus on accumulating super, there has not been the same level of focus on decumulation.
CEPAR chief investigator Michael Sherris said Australia is leading the world in policy that attempts to combine flexibility and government safety net provisions.
But lead author CEPAR senior research fellow Rafal Chomik said: “A range of retirement income products can provide a stream of resources in retirement, some of which are unavailable in Australia or operate in an inefficient market.
“These include products related to longevity risk insurance, long-term care insurance and equity release products – all of which have been the subject of extensive research here at CEPAR and highlighted in our latest research briefs.”
Chomik said trustees need to determine what retirement income products they offer members.
He said new retirement income products, such as pooled, deferred, long-term care, or variable annuities, looked to provide security and flexibility for members in retirement.
Sherris said the availability of annuity products has grown, but there has not been much demand for them, adding product innovation is vital to meet individual needs.
He also said locking in current low interest rates in a fixed or life annuity is not optimal to generate retirement income.