Claims by the Financial Systems Inquiry (FSI) that the retirement phase of superannuation was underdeveloped overlooked the self-managed superannuation sector and focussed on the current state of retirement income products according to the SMSF Professionals’ Association of Australia (SPAA).
SPAA Technical & Policy senior manager Jordan George said the Australian retirement system was working well but further work needs to be done to develop other retirement income products to the same level as SMSFs.
Speaking at SPAA’s Technical Conference in Sydney on Tuesday George said the FSI and upcoming Government Pension Review had identified that the retirement phase of superannuation was underdeveloped and did not match retirees’ risk management needs.
He said SPAA had agreed with the FSI on this assessment but any further examination of the sector needs to look beyond products and examine the framework of the retirement system.
“In this respect SPAA contends the SMSF sector is demonstrating just how well the Australian retirement system is working and meeting Government objectives by successfully providing income streams to retirees and is leading the industry in doing so.”
Jordan stated that about 35 per cent of SMSF trustees are already in pension phase and 64 per cent of retirement phase assets are held by SMSFs and thus the long term adoption of appropriate policy was of importance to SPAA.
He also said the FSI and pension review were opportunities to open up the availability of other relevant retirement income products which should focus on flexible, principles-based approaches and not compel people to adopt defined strategies.
