The superannuation industry is coalescing around support for an 'intelligent default' arrangement that protects a consumer's right to seek advice and exercise choice at retirement, according to the Financial Services Council (FSC).
In a column to be published in the March edition of Super Review, FSC senior policy manager, superannuation, Blake Briggs has pointed to the change in industry attitudes which has occurred over the last few years.
"The debate around retirement policy has evolved and matured over recent years," he said. "The polarising debate between supporters of compulsory annuitisation and those protecting member choice appears to have fallen away."
"It is important that we continue to work towards securing consensus to ensure that we get retirement policy right," Briggs said. "The superannuation industry is well positioned to lead this debate and shape the regulatory and political response of the Government and Opposition."
"We should seize this opportunity to achieve a policy outcome that accommodates consumers' interests and what superannuation funds wish to achieve for their members, rather than risk an imperfect political solution imposed on the industry," he said.
Briggs said the onus was on the industry to progress the debate on reforming retirement policy whilst at the same time building trust that the system is achieving its objective and noted that the FSC had been advocating for superannuation trustees to build into their MySuper product a seamless transition into retirement phase for members who do not exercise choice at retirement.
"The FSC supports trustees retaining control over the design of the retirement product so it can be tailored to the demographic profile of a fund's membership. This allows default products to potentially include an annuity, an allocated pension, or a combination of both," he said. "Retaining trustee discretion to design a retirement product for their members also allows a point of competitive differentiation for funds and will drive innovation and competitive pricing."
Briggs said the FSC's position was based on our view that, unlike MySuper, a 'one size fits all' approach was not suited to retirement policy.
