Accountants have sought a place at the table when the Government initiates a review of the retirement income system, suggesting an essential element is proving access to affordable financial advice.
The Institute of Public Accountants (IPA) has welcomed a recent announcement by the Treasurer, Josh Frydenberg that he will be commissioning a review of the retirement income system which will be inclusive of the interfaces between superannuation, government pensions and taxation.
Commenting on the move, IPA chief executive, Andrew Conway said the review was long overdue in circumstances where there was no well-defined view on what a retirement living standard should look like.
“There is also the budgetary considerations of funding the age pension and superannuation tax concessions and ensuring that the system is sustainable going forward,” he said.
“The need to encourage greater investment in superannuation to facilitate self-funded retirement is critical as Australia will not be able to fund government pensions in the future, especially considering our ageing population,” Conway said. “Different mechanisms need to be considered given the longevity risk when superannuation members retire. This includes the development of annuity type products.”
However, he said there was significant complexity in the system with many competing interests, which all needed to be given due weight if Australia was to develop an equitable retirement income system.
“For instance, we cannot ignore the findings of the Productivity Commission report which suggested reforms to benefit members through lower fees and higher investment returns could generate an extra $533,000 for a new job entrant today when they eventually retire,” Conway said
“An essential element of this review will be to provide access to affordable financial advice, which is what public accountants, as trusted advisers, can deliver,” he said.