Australia has ranked sixth globally for retirement outcomes thanks to its ‘quality of life’ and ‘finances in retirement’ ratings, according to the 2017 Natixis Global Retirement Index.
The Natixis index found Australia trailed behind Norway, Switzerland, Iceland, Sweden, and New Zealand.
While the country placed fifth for finances and ninth for quality of life, it fell behind in the sub-indices of material wellbeing and health.
Natixis Global Asset Management in Australia managing director, Kevin Haran, said the index revealed room for improvement for material wellbeing which measured retirees’ ability to support themselves based on income per capita.
“This suggests that there still needs to be greater individual engagement with super in order for retirees to achieve the outcomes they desire,” Haran said.
Haran noted that innovation from asset managers could help Australians achieve better retirement outcomes.
“Australia’s mandatory superannuation policies are lauded by policy-makers around the world in terms of their improvement to retirement outcomes. However, at an individual level, many people don’t have a clear idea of what is needed to retire comfortably,” he said.
“The GRI aims to help spark the initial conversation about retirement plans. The asset management industry has a vital role to play here in helping to educate investors; understanding their goals, and constructing durable portfolios to respond to market factors and each individual’s risk tolerance.”
Australia’s improvement from 13th to ninth for its ‘quality of life’ came off the back of environmental progress primarily due to declines in CO2 emissions and increased prevalence of renewable electricity.
“From a local perspective, we’ve seen an increased demand for ESG [environmental, social, governance] offerings within superfunds’ offerings,” Haran said.
The index said the high ranking in overall finances demonstrated positive signs for the purchasing power of retirees.
Amid a challenging market environment, three super fund CIOs have warned against ‘jumping at shadows’.
The professional body is calling for the annual performance test to transition to a two-metric test, so it better aligns with the overarching duty of super fund trustees to act in the best financial interests of their members.
AustralianSuper, Rest, and HESTA agree on the need to retain and enhance the test, yet they differ in their perspectives on the specific areas that warrant further refinement.
Australia’s second-largest super fund has confirmed it is expanding its presence in the UK following significant investment in the region.
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