Financial Standard Comments - Super industry responds to MYEFO Super industry heads have responded to yesterday's MYEFO announcement from the Government with concerns raised about the reliance of super products on the equity markets. https://www.financialstandard.com.au/feed/latest/?story=12517853 Wed, 30 Nov 2011 16:46:24 +1100 Wed, 30 Nov 2011 16:46:24 +1100 en-AU Copyright 2026 Financial Standard 5 Comment by Flavour of the Month () Why is it that annuity promoters always come out of the woodwork with the scare tactics when equity markets are having a hard time? This also usually coincides with the bottom end of the interest rate cycle. Shouldn't they have been promoting these products about four years ago? So what Mr Cooper is advocating is that people lock into long term/lifetime income streams determined on the current interest rate environment. How will people be placed further down the track if / when inflation starts to really kick? Given the destruction of Australia's manufacturing sector and the likkelihood of a rising Chinese currency and wages it's quite likely we will see a rise in inflation down the track. If he's concerned about volatility, what's wrong with having some solid fixed interest and term deposits sitting within your account based pension thus having the flexibility to re-invest if rates rise? The trade off for an annuity provider wearing the longevity risk is lower returns relative to interest rates. So our clients should accept lower returns as well as the mortality risk to their estate, just so more annuities can be sold.

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