By Jason Spits
FUND managers and planning groups have followed financial services industry groups in giving their approval to the superannuation and retirement income streams policy announced last week by the Federal Treasurer, Peter Costello.
AMP Financial Services, Macquarie Adviser Services andZurichall view the changes positively, as they provide better options for retired and retiring Australians.
AMP Financial Services managing director Craig Dunn says the ageing population and inter-generational concerns were important issues and the proposed policies should address them.
“Simplifying superannuation arrangements for older workers is good public policy. This increased flexibility is consistent with what our customers and the community in general are telling us they want,” Dunn says.
Macquarie Adviser Services technical manager David Shirlow says the new policy for market-linked pensions to qualify for favourable social security and tax treatment was in the best interests of people nearing retirement.
“When the new market-linked pensions become available on September 20 this year, investors will be able to effectively stay with a balanced or growth asset strategy, by transferring some or all of their accumulated super into a market-linked pension,” he says.
However, Zurich says some details of the changes are unclear and may lead to uncertainty among some older workers.
The group says the proposal to reduce the social security asset test exemption from 100 per cent to 50 per cent is not retrospective and all asset test exempt income streams purchased before September 20, 2004, will continue to receive the full asset test exemption.
The Investment and Financial Services Association (IFSA) and the Association of Super Funds Australia (ASFA) also approved the Government’s stance, although the latter claimed the changes do not fully tackle how workers can build sufficient retirement savings from the outset.
