The Federal Government has been urged to lift the pension age and incentivise income stream superannuation options to lessen the economic burden left by the baby boomer generation.
In a pre-Budget submission, the Actuaries Institute said structural change was imperative to combating longevity risk and unexpected rises in life expectancy.
The removal of barriers to innovation in the product space, which would allow deferred lifetime annuities (DLA) to become a viable option, needed to be prioritised, according to the institute.
“The current limited range of income products that pool longevity risk, including the unavailability of pure longevity protection in the form of a deferred lifetime annuity (DLA) and other guaranteed retirement income products, is a major consumer issue for the growing number of baby boomers who are retiring each year,” the submission said.
It also called for the Government to incentivise income stream superannuation products to reduce the likelihood of retirees running out of lump sum super and using the pension as a fallback.
“In particular, retirees should be incentivised to protect themselves against their own longevity,” it said.
As a further measure, the institute said the pension age should be further lifted in line with rises in life expectancy.
In addition, legislative barriers preventing older Australians from staying in the workforce should be removed, it said.
