Actuaries Institute urges policy shift to address retirement challenges

About 16 million Australians are facing challenges when it comes to retirement.

The Actuaries Institute emphasised crucial hurdles that must be addressed as the focus of superannuation policy shifts towards bolstering Australians in retirement. 

In a submission filed on 9 February to the Treasury consultation, the institute backs the government's pivot in policy emphasis. 

Historically, superannuation policy has concentrated on the accumulation phase, which is now approaching maturity, leading to larger cohorts of Australians transitioning into retirement.

"Superannuation is integral to the financial and broader wellbeing outcomes of 16 million Australians, who face complex challenges on their journey to retirement. We need to make navigating these important life decisions as easy as possible, for as many people as possible." Elayne Grace, CEO of the Actuaries Institute said.

A primary obstacle identified is the need to transform the national perspective on superannuation from being solely a "nest egg" to one focused on generating income tailored to meet diverse retirement needs. 

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Tim Jenkins, Chair of the institute’s Superannuation and Investments Practice Committee, highlights the necessity for a comprehensive assistance framework to alleviate apprehension surrounding superannuation withdrawals.

Jenkins emphasises the importance of offering diversified default solutions for retirement funding, aligning with top-ranking pension systems globally. 

However, he cautions against the notion of a "standardised product," advocating for a broader approach that incorporates various income sources such as part-time work, government support, and home equity.

Additionally, the institute advocates for the government's proactive measures in enhancing population-wide financial literacy and retirement phase guidance. 

This includes a reaffirmation of the National Financial Capability Strategy and the introduction of standard definitions for key features of retirement income products.