The Actuaries Institute has used its response to the “Retirement Phase of Superannuation – Discussion Paper” to endorse the federal government’s shift in policy focus to give more attention to the drawdown phase of Australians’ retirement savings.
The industry body’s submission recognised the need for this change of direction in policy due to the fact an increasing number of individuals are moving into retirement and suggested the previous legislative and regulation measures pertaining to accumulation phase are starting to reach maturity.
“Superannuation is integral to the financial and broader well-being outcomes of 16 million Australians who face complex challenges on their journey to retirement. We need to make navigating these important life decisions as easy as possible for as many people as possible,” Actuaries Institute chief executive Elayne Grace noted.
Moreover, the professional body suggested the mindset of individuals needs to reset from currently looking at superannuation as a savings vehicle that exists for generating income to one that can support people’s needs when they have exited the workforce.
“Beyond the welcome fixes to financial advice for those Australians, we should be thinking about a holistic help, guidance and advice framework to remove the caution that many people feel when drawing down on their superannuation,” Actuaries Institute chair Tim Jenkins noted.
While the submission pointed out encouragement is needed for the industry to turn more of its attention on retirement incomes, it emphasised the Actuaries Institute does not believe this notion is synonymous with formulating a standardised product as a viable solution.
“No single solution, that covers a mix of regular income and savings to draw down, and which lasts a lifetime, suits everyone. A broad frame is required to consider super alongside any sources of government support, income from part-time work and home equity to fund a dignified retirement,” Jenkins said.
The industry body also took the opportunity to commend the government on its recommitment to the National Financial Capability Strategy and the introduction of standard definitions pertaining to the main features of retirement income products.