The founder of Financial Synergy has partnered with some of Australia's leading actuaries to launch a new business aimed at tackling the ongoing retirement income and longevity risk problem.
David Orford's new venture, Optimum Pensions, is rolling out a product called Real Lifetime Pension (RLP). RLP is a white-label solution for superannuation funds and is designed to accompany the regular income stream from an account-based pension.
Optimum Pensions said it could provide better returns than traditional annuities and would be "paid for life, no matter how long you live."
The product also includes the option to revert to a partner or spouse after the owner's death.
Orford explained: "There are several dimensions to this objective including adequacy, broad protection against inflation and longevity risk."
"Improvements in mortality have men living 19 years and women 22 years on average longer than the typical age of retirement, which is currently 65 years. Today more than 50 percent of retirees live longer, creating a significant risk each pensioner's retirement funds may run out before they die. Longevity risk is the least understood risk by most working Australians," Orford said.
Working alongside Orford are chief strategist and corporate adviser Richard Leckey; former Vision Super chief operating officer Peter Rowe as manager, business development and implementation; former National Australia Financial Management chief actuary Alan Haintz; AMP and Mercer actuarial alumnus Derek Rees-Lee; and ex-Meredith Asia-Pacific analyst Max Henbest.
Orford said the business is "addressing the need for a broader retirement income solution for individuals within its policy framework. It is in Australia's interest to ensure our world class superannuation savings system becomes a world-class retirement system. Lifetime income streams will play a crucial role in achieving this goal."