Pension the reality for most members say LGS
The superannuation industry is too focused on longevity risk when the reality for most current members will be reliance on the age pension, according to Local Government Super chief executive Peter Lambert.
"I think the industry does get caught up too much in this conundrum of longevity risk, and I think the reality is if someone has been in super for say 20 years and (has) only contributed 9 per cent, there is no way they can retire for the rest of their life on income of 50 per cent.
"We beat ourselves up and think we have to resolve it, but the reality is most of the current members will go onto a pension at some stage of their life," he said.
Lambert said the industry should be focused on providing sufficient income for the active stage of a member's retirement, with a view to moving away from the age pension as the super system matures.
"That's the now, and in the future we will see people retiring that have been in super funds for 30 and 40 years and having 12 per cent plus contributions, but for the vast majority that's simply not going to be the case," he said.
Retirement planning was a necessity at least in the last 10 working years' of a member's life, as once they retired they would be unable to access levers to change the level of income they would be left with, he said.
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