Superannuation funds implementing lifetime retirement income policies need to consider retirees’ needs to have access to capital, an inflation-linked lifetime income and the ability to leave an inheritance, according to Optimum Pensions.
The sustainable retirement incomes specialist also said that the industry needed to work with experts to deliver an easily understandable and investible, fully insured, and transparent retirement option to sit alongside existing superannuation structures.
Following this week’s Federal Budget, Optimum Pensions said that the Government was clearly committed to allowing a new range of retirement products that would suit the above needs.
Optimum Pensions chief executive, David Orford, said that lifetime retirement income policies would allow the superannuation industry to respond to increasing longevity, therefore assisting it to “meet the true purpose of superannuation”.
“The 2018-19 Budget has tackled the single biggest issue facing everyday Australians – longevity. Longevity is one of the greatest risks we face in retirement as more than 50 per cent of Australians outlive their life expectancies, which continue to rise. Living longer than expected increases the chance that we will suffer declining income as we age,” he said.
“We applaud the decision to introduce new levels of support for lifetime retirement income products. This has established a new benchmark for post-retirement for Australians, giving them more options and extra value and protection for their future.”