Speaking at the Actuaries Financial Services Forum in Sydney on Monday, Deloitte principal, actuaries and consultants, Peter Larsen said “arguably both the UK system and our system are not sustainable”.
“We have got people retiring with lowish balances, at least for the next 20-plus years, and very high reliance on the age pension. Where we end up is a good question … the real danger from my point of view is: do we end up with the worst of both and not the best of both? And I am sure that will be continuing debate around policy for some time,” he said.
Mr Larsen said to counteract these brewing problems, the government should encourage people to work beyond 65 and increase the employment of older Australians.
“Companies will then be able to better utilise people as they get older, and not sort of recycle them and exit them,” he said.
Mr Larson added that we will “clearly” see retail and industry funds trying to stop the “flow out” into SMSFs.
“We are already seeing a lot of that in member direct investment options, which are probably the biggest attraction to SMSFs, and I expect that will become more sophisticated,” he said.
“I think the big retail fund and industry fund players are certainly going to come up with a solution that potentially allows people to do everything they could in an SMSF,” he added.
