Reforms to the treatment of retirement income products have not gone far enough, according to the Association which fought hard for the latest changes.
The Australian Retirement Income Streams Association (ARISA) has called for further intervention by the government to promote the use of growth assets as a post-retirement investment strategy.
The call follows the release of a report by the Association which shows a huge shift in money into long-term income streams, following the September 20 changes to Department of Social Security rules.
ARISA chairman Kieren Dell says the December quarter was the second quarter in succession to witness the huge shift in fund allocation as financial planners come to grips with the new rules and the number of products on the market increases.
Dell says the move of funds into long-term income streams is just what the government had in mind when it devised the legislation.
“The swing away from short term products is exactly the type of effect the Government would have been hoping for,” he says.
However, after six years battling for the September 20 changes to the assets and income test, ARISA believes more can be done to provide a platform for retirees to invest in growth assets. Current restrictions limit investment choice to fixed interest.
“This would mean the government would ultimately pay less pensions because the retirees investments would be in productive assets with better long-term growth potential,” Dell says.
