Aberdeen Standard Investments comments on Retirement Income Review

From

Brett Jollie

Aberdeen Standard Investments Australia Managing Director Brett Jollie welcomed the Retirement Income Review findings and its acknowledgement that insufficient attention had been given to retirement income.

“As Aberdeen Standard Investments (ASI) has said consistently, Australia has a gaping retirement income system gap. Up until now the solutions have been piecemeal. And it is fair to say that superannuation funds are not ready for the huge shift to decumulation, despite the fact it has already arrived for many Baby Boomers,” Mr Jollie said, adding he looked forward to the government’s response.

ASI Head of Retirement and Product Strategy Jason Nyilas, said a key recommendation of the 2014 Financial System Inquiry was that superannuation funds should make available what are referred to as Comprehensive Income Products for Retirement (CIPR’s) – an approach referenced in the review report.

“While we are happy with advancing the concept of the Retirement Income Covenant in order to provide an overall strategic framework that would guide members into effective retirement strategies, we believe advocating the CIPR approach now puts the cart before the horse. The industry should focus on looking at the complete end-to-end picture, starting with understanding an individual’s wants, needs, risk appetite and changing goals. Product should be the last thing you look at when designing retirement income solutions.

“Without an adequate and clearly mapped out retirement income solutions framework, Australians are headed into the unknown when they retire. We are not currently set up to offer mass customisation and a one size fits all approach is not what is needed. There needs to be a robust retirement income framework before we consider CIPR implications and I hope this review is a catalyst for this,” Mr Nyilas said.

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