The government's retirement income framework will impose high costs on super funds to develop products their members don't want, says Sunsuper's national manager for corporate business.
By compelling super funds to offer 'comprehensive income products for retirement' (CIPRs) to their members, Treasury is committing "actuarial fraud around longevity".
That was the assessment of Sunsuper national manager for corporate business Ray Murray at an Actuaries Institute conference in Sydney.
"I do not see the demand; I do not see the members wanting to do this. Funds will spend a lot of money developing something which will have no demand and no people will participate in it," Mr Murray said.
Given the guarantees contained in CIPRs, super funds will either have to introduce capital requirements or outsource to third-party product providers, he said.
"It's alright if you're a big fund with lots of defined benefit and lots of life annuity experience – but I think it's really complicated for a major part of the industry."
"Why, if these are such a good idea, is compulsion [to offer CIPRs] involved? If they're a good idea, they'll be bought in the marketplace by the funds, so why force funds to go down [that path]?" he asked.
In response, Treasury principal retirement income policy adviser Darren Kennedy said: "It's one of the tensions that have been debated over the last two years as this retirement income framework has been developed."
Update: In response to Mr Murray's comments, Sunsuper said that its "corporate position" is that it "strongly supports the work the government is doing to improve the efficiency and effectiveness of the retirement income system".
"We recognise that pooled longevity products can be part of the overall solution to help retirees better manage their retirement savings. Sunsuper will continue to conduct analysis with a view to offer our members a CIPR product in the future," said the statement.