The Financial System Inquiry and Government Pension Review have the potential to open up the availability of “relevant and appropriate” retirement income products, according to the SMSF Professionals’ Association of Australia.
In its interim report, the FSI said the retirement phase of superannuation was underdeveloped and did not meet the risk management needs of many retirees, SPAA’s Jordan George noted at the association’s State Technical Conference this week.
“This is an assessment of the current state of retirement income products that SPAA agrees with and we will be working with both inquiries to achieve a better policy outcome for retirees,” he said.
“It is important that the FSI’s first consideration is the overall framework of our retirement system rather than just a focus on products.”
Mr George noted the FSI is saying is that an “important consideration” is to have a more flexible, principles-based approach to determining the eligibility of retirement income products for tax concessions and social security concessions.
“When coupled with the government Review of Retirement Income Products, which will look at the regulatory barriers restricting the availability of relevant and appropriate retirement income stream products and the minimum payment requirement for account-based pensions, it is clearly an issue that the government understands has to be addressed,” Mr George said.
“SPAA will prepare detailed submissions for both inquiries. But the organisation’s starting point will be the principle that whatever policy decisions are reached they must be based on people not being compelled to adopt a defined strategy,” he said.
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