Sequencing and longevity risk for retirees, as well as meeting demand for shifting retirement priorities, need to be addressed by Australian super funds, according to MTAA Super.
More than four million Australians are expected to retire within the next decade and with that demographic shift comes a shift in priorities when it comes to super.
"I think the market is looking for new products that address those issues. My own view is that the market needs more choice and more options in this space," MTAA Super chair John Brumby told InvestorDaily.
"People are switching their focus from basic wealth creation to actual retirement management. Australian super funds need to quickly wake up to this.
"Providing options to mitigate risk is critical if our superannuation system is to deliver on its goal of providing a relaxed and secure retirement," he said.
Australians are taking their retirement far more seriously than ever before, according to Mr Brumby, who says their goal is to enjoy their retirement years without worrying about whether they will outlive their super savings
"When you look at retirement management, if you're a beneficiary, you don't want to be spending every hour of every day when you're in your 70s looking at the stock market and worrying about whether you're going to have enough money to live on in 10 years' time," Mr Brumby said.
MTAA Super has launched MTAA Super RetireSafe, in conjunction with MetLife Australia, in response to shifting retirement priorities that increasingly emphasise risk protection.
The new product is a guaranteed income for life product, giving protection against market and longevity risk.
"In the next 12 months, two years, three years there will be a lot of interest in this space and there will be more products like this in the market, in exactly the same way as we have seen in annuity type products over the last decade," Mr Brumby said.
With MTAA Super RetireSafe, lifetime monthly pension payments continue to be made even when an account balance is reduced to zero. The product will also offer members the potential for growth when markets are strong, protection against negative investment performance, access to capital and a death benefit.
MTAA Super RetireSafe is open to all Australians aged 60 and over with a superannuation account balance of $50,000 or greater.
