Federal government plans to examine the ability of the superannuation system to create new retirement income products and services have been welcomed by two advocacy groups, which have called for end-users to be the key driver of any new developments.
The Association of Superannuation Funds of Australia (ASFA) noted the review, which is in its initial consultation phase, could remove regulatory barriers to better products and otucomes for retirees.
ASFA interim chief executive Leeanne Turner said: “The take-up of retirement income products offering protection against the financial consequences of longevity has been modest to date. What is needed is the removal of any remaining regulatory barriers to the development of such products.”
Turner said the needs of consumers must drive the review and any changes that result from it.
“Regulatory settings regarding provision of advice and guidance in regard to retirement income products need to be supportive. Defaults, nudges and advice only work if the retirement products involved are suitable for their target market and the individuals taking them up,” she added.
Council on the Ageing (COTA) Australia chief executive Patricia Sparrow said the consultation paper was a positive step in addressing retirement income security, but the government must consult with fund members as well.
“We know the best policies are made in consultation with the people impacted. We’ll be ensuring older Australians are given every opportunity to feed into this consultation process – both those planning or transitioning into retirement and those who have already started their next life phase,” Sparrow said.
“COTA long advocated for superannuation to be paid on pay day, as opposed to quarterly, and the fact the federal government has already taken action to mandate that change is important. It’s certainly a very sensible step forward, but of course it won’t solve all the problems people face when it comes to retirement income.
“We’re looking forward to being part of the discussion about what else needs to be done to improve the system for every Australian, including women, who we know still retire with balances lower than men.”
