The Actuaries Institute has lamented the Government's failure to enact measures in the Federal Budget to encourage the take-up and development of annuities in Australia.
Actuaries Institute chief executive Melinda Howes said the risk of retirees outliving their retirement savings must be addressed with "a range of retirement income products".
Specifically, Howes said there was a need for products such as deferred lifetime annuities and variable annuities (which combine an account-based annuity with protection against longevity and market risk).
"Australians are one of the longest lived populations on the planet … [and] with the fast pace of biomedical advancements there is a growing possibility of life expectancies increasing much more quickly than recent trends would suggest," Howes said.
In its Budget submission, the Actuaries Institute recommended amendments to the superannuation, aged care and Centrelink rules that would increase the take-up of guaranteed income products, Howes said.
The Actuaries Institute advocated the approach of placing MySuper customers into an income stream that allows "flexibility and control of capital" in their younger retirement years, and then guarantees income in their later years, Howes said.
The removal of tax and superannuation disincentives would be unlikely to result in a significant reduction in revenue for the Government because "retirees' money is currently going into other tax-exempt retirement products", added Howes.
"With the baby boomers already retiring, we have run out of time to solve these problems … We are staring down the barrel of long longevity, and we don't know how soon it will hit us," Howes said.
The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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