Specialised accreditation should be devised for financial planners providing advice around retirement and post-retirement, according to the Association of Superannuation Funds of Australia (ASFA).
The suggestion has been made by ASFA chief executive Pauline Vamos in a statement generally backing calls made by the Centre of Excellence in Population Ageing Research (CEPAR) for the removal of the impediments that currently hinder the development of new retirement income-stream products.
The call is contained in CEPAR's submission to the Financial Systems Inquiry which urged the inquiry panel to take into account the rapid expansion of Australia's post-age 65 population which is expected to reach 7.2 million by 2050.
CEPAR director, professor John Piggott said that it was in these circumstances that policy makers, product providers and regulators needed to get to grips with the issue as quickly as possible.
"The absence of options to access superannuation savings as gradual income forces the lump-sum culture on people who may not want it," he said, arguing that the Government ran the risk of being forced to further subsidise retirement incomes if it did not provide options.
Supporting the thrust of CEPAR's submission, Vamos said ASFA believed that, at a minimum, a number of impediments should be removed to help boost the post-retirement product market. These included amending the Superannuation Industry (Supervision) Act to provide equivalent treatment of post-retirement products offered by life insurance companies and by superannuation funds, preferably through the development of regulations which apply to both; and amending the Australian Prudential Regulation Authority (APRA) prudential standard applying to minimum surrender values of pension and annuity products to reflect the special characteristics of such products.
ASFA also supports amending the means test applied by Centrelink to exempt deferred annuities from both the asset and income tests during the period prior to payment, and putting a new administrative arrangement in place so that the Australian Taxation Office, APRA, the Australian Securities and Investments Commission and Centrelink undertake the assessment of new post-retirement products on a consistent and coordinated basis.
It also supports making legislative amendments to provide tax treatment for deferred annuities and other products comparable to that provided for existing post-retirement products, and permitting trustees of a self-managed super fund (SMSF) to purchase deferred annuities, and like products, on behalf of an SMSF member.