In August 2021, the Actuaries Institute published its Public Policy Statement on “Securing Adequate Retirement Incomes for an Ageing Australia.”
Since then, there have been several important developments, including:
- The Retirement Income Covenant (RIC) came into effect on 1 July 2022, which requires every superannuation fund to have a retirement income strategy for the benefit of members who are retired or who are approaching retirement.
- New relief for superannuation calculators and retirement estimates set out in ASIC (Superannuation Calculators and Retirement Estimates) Instrument 2022/603 also took effect on 1 July 2022.
- We have had a change in Federal government and the new Assistant Treasurer and Minister for Financial Services has said how important it is that superannuation has a defined objective, similar to other initiatives such as Medicare.
With that in mind, the Institute’s Retirement Strategy Group got together in November to discuss the changing retirement landscape and these most recent developments. The first conclusion reached by the group was that the 2021 Public Policy Statement and its Supporting Document are still appropriate and provide a great roadmap for how the profession thinks about retirement issues.
In particular, the Group agreed that the Institute should continue to support proposals that a clear objective should be legislated for the retirement income system. The Group also discussed a range of industry issues about how to simplify the system, improve its efficiency, deliver adequacy and improve equity.
At the conclusion of the meeting, the Group agreed that we should establish four working groups to focus on the following issues that we regarded as being important for the industry and relevant for the Institute to lead.
- Low Income Earners – Anthony Asher will address the various issues affecting low-income earners and how we can improve retirement outcomes for this group. Things like the LISTO, rental assistance, the age pension level for singles, affordable and social housing, the Work Bonus and disincentives for older Australians to work.
- Role of the Home – Andrew Boal will focus on how to access home equity to improve retirement outcomes including downsizing initiatives, the Home Equity Access Scheme/Pension Loans Scheme and reverse mortgages, as well as the inclusion of part of the value of the home in the means tests.
- Simplifying the Means Tests – David Knox will examine ways to simplify the means tests including how to combine the asset and income tests by converting assets into an income stream including the option discussed in the Retirement Income Review.
- Insurance in Super – Tim Jenkins will look at the role of insurance in superannuation including the provision of death benefits and how best to provide affordable and sustainable disability insurance.
If you are interested in contributing to the research and policy on these important issues, please contact the relevant working group leader direct or via Vanessa Beenders, Executive General Manager, Public Policy and Professionalism at the Institute.
This is an exciting stage of policy development and we encourage members to be part of it.
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