In its response to the Financial System Inquiry interim report, the Actuaries Institute made the case for a “clearly designated policymaker” to oversee the retirement income system.
“The interaction between retirement incomes, the age pension, aged care, healthcare and home wealth is complex and critical to the overall sustainable functioning of the economy,” said the submission.
“A retirement income blueprint needs to be formulated to increase consumer confidence in the system,” it said.
The Actuaries Institute revealed it is assisting the FSI Secretariat in formulating a separate paper on the topic that examines “longevity, inflation and investment risks”.
Speaking about longevity risk specifically, the submission noted the retirement phase of superannuation is “underdeveloped” and “does not meet the risk management needs of many retirees”.
“The government should, as part of its development of an overarching retirement income policy, consider options for boosting the uptake of income stream products including the introduction of sensible default options for retirees transitioning to or in the superannuation drawdown phase,” said the Actuaries Institute.
