Accumulating superannuation is one issue, but ensuring Australians are able to spend their income optimally through retirement is another. This need presents an opportunity for super funds to provide better retirement income solutions for members. The prize is happy customers for life.
Super funds are debating the viability of retirement income products and whether it is best to dive in, wait for legislative changes, or just stick to current strategies. The issues of scale, product complexity, customisation and member advice underpin the hesitation currently being displayed by the industry. But there is movement. Some funds are well underway in building out their retirement income frameworks.
Getting the philosophy right first; developing a strategy second; considering the product suite third; and lastly assessing how they integrate with the marketing and member administration systems is the most sensible path to a successful retirement income future. Somewhere along the way, funds will also need to develop a way to assess how well they are meeting the diverse needs of their retired members.
These challenges were debated by CEOs and senior executives from the super industry at two roundtable discussions hosted by KPMG in Sydney and Melbourne in February 2016.
The events were facilitated by Paul Howes, KPMG Partner, Head of Wealth Management Advisory, and Jeremy Cooper, Chairman, Retirement Income at Challenger. This paper seeks to capture the key themes and outcomes of the discussions.
In our submission to Treasury on Superannuation, we outline a series of proposed changes to make the superannuation system fairer and stronger.