Rice Warner has added one word to the Financial System Inquiry’s (FSI) proposed superannuation objective in its submission to Treasury.
Adding the word “adequate” the actuarial research house’s proposed definition was “to supplement of substitute the Age Pension to provide an adequate income in retirement”.
While Rice Warner largely agreed with the FSI’s subsidiary objective recommendations, the firm found the “facilitate consumption smoothing over the course of an individual’s life” objective to be problematic.
“This is problematic given varying incomes needs over retirement with likely spikes due to unforeseen circumstances,” the response said.
“We do not believe that the objective is viable. An objective to allow retirees to meet income needs as they occur would be more practical.”
Rice Warner also said life insurance, non-super savings, and current uses of super other than to provide a retirement income should have been considered in the FSI recommendations.
Of life insurance, the submission said was a significant omission as many super members will be prevented by death of disablement form working through to retirement age, they will not be able to provide for themselves before and after retirement without the supplement of an insurance benefit.
