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Super funds urged to focus on post-retirement
Superannuation funds should give particular attention to the design and positioning of post-retirement solutions this year, according to a new analysis released by Mercer.
The firm has issued a list of actions it believes every superannuation provider needs to consider this year, with Mercer director of strategic research, Hendrie Koster urging a focus on outcome-based investing, rather than a one-size-fits-all approach.
"Many super investment strategies still assume all members have the same investment objectives and therefore invest in the same way regardless of the members' specific needs," he said. "This approach will have to change in 2016."
Koster urged that investment strategies be flexible and tailored to the specific needs of each member, including their balance, gender, and objectives.
He said the design and positioning of post-retirement solutions was also important, with action needed to provide retirees with a flexible income solution that provides an adequate and sustainable income for their retired life.
"Post-retirement has certainly moved up the priority list for the industry as a whole, but the market is still immature and the range of solutions is thin," Koster said.
"We hope to see a strong increase in the number of tailor-made post-retirement offerings that have so far been limited in the absence of clear government guidance."
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The research house has offered a silver lining after super fund returns saw the end of a five-month streak last month.
A survey of almost 6,000 fund members has identified weakening retirement confidence, particularly among those under 55 years of age, signalling an opportunity for super funds to better engage with members on their retirement journey.
The funds have confirmed the signing of a successor fund transfer deed, moving closer to creating a new $29 billion entity.
A number of measures, including super on Paid Parental Leave, funding to recover unpaid super, and frameworks to encourage investment in the energy transition, have been welcomed by the superannuation industry.
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