The Association of Superannuation Funds of Australia (ASFA) has attempted to break the deadlock on retirement income innovation with the launch of a paper that sets out a framework for building an effective post-retirement system.
Entitled A New Framework for a Better System, the paper argues for an opt-out MyPension product for default members, as well as compulsory disclosure income stream projections.
ASFA chief executive Pauline Vamos said: "We know that the ageing population is going to be a game changer when it comes to retirement incomes policy. It's time we stop pointing at the problem, and start developing the solutions required to deliver a better system for Australia's retirees.
This will require innovation and bold policy decisions, which is why we have released a framework that will guide policymakers towards creating a system where delivering income streams in retirement are at its core."
Vamos said the days of members taking lump sums "are numbered", with last year seeing more members taking income streams than lump sums for the first time.
"Most people are looking for a steady income stream throughout their retirement," said Vamos. "We need to ensure that they can make a safe choice, with as much flexibility as possible to cater for a very diverse group of older Australians."
Vamos said the system is not delivering as well as it could for women, the self-employed, casual workers and Indigenous Australians. "We must start making policy changes now, to enhance the superannuation experiences of these groups, and ensure they able to accumulate adequate savings for their retirement."
The paper also recommends the removal of the $450 threshold for the SG, allowing employers to contribute more super for their female workers, extending compulsory super to the self-employed and applying SG to all substantive income replacement payments including income replacement insurance, parental leave and workers compensation.
Vamos launched the paper at the ASFA conference in Melbourne. In her speech, she said the paper did not recommend the introduction of compulsory annuitisation, which she said was falling out of favour around the world. "One size fits all is not an option," she said.
She urged all sections of the industry to come together on the issue of retirement income, and stop publicly fighting.
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