The lack of post-retirement products is letting the superannuation system down, according to BT Financial Group general manager for superannuation, Melinda Howes.
Speaking at Super Review's Future of Super conference today, Howes said solving the post-retirement product issue would make Australia's super system the best in the world.
"If we can improve our post-retirement offers, we can strengthen the overall superannuation system and ensure more Australians are financially secure in retirement," Howes said.
She said the barriers that were stopping product development were:
"The first step is to engage with super members in a meaningful way about their super and retirement," Howes said.
"Secondly, as an industry we need to deliver post-retirement products that deal with the main retirement risks; longevity risk and market risk."
She noted that while the government's announcements about CIPRs and changing the tax treatment of deferred annuities were encouraging for product development, no one had tackled how to invest in retirement to avoid sequencing risk.
Howes said there was also a need for offers where members could seamlessly transition from accumulation to post-retirement.
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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.
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