Superannuation funds would be helping their members more if they focused on informing them about their future retirement incomes rather than focusing on account balances.
Former Cooper Review chairman, and now Challenger executive, Jeremy Cooper, joined with former Australian Workers' Union national secretary and now KPMG consultant, Paul Howes, to argue during the Financial Services Council (FSC) annual conference that there was not enough focus being give to retirement incomes, particularly in the context of retirement income streams.
Cooper said he believed there was good reason for the Government to mandate retirement income stream products as a default in circumstances where they might only become the preserve of larger, more advanced funds.
Mercer senior partner, David Knox, said he also agreed that there was a need for change in circumstances where it was clear that account-based pensions represented a part of the overall solution.
"We need to recognise the longevity risks and the benefits of pooling," he said.
"We are not focusing enough on giving members a projection of their retirement incomes, we are focusing too much on account balances," Knox said.
Howes agrees with the undue focus on account balances and said that this had too often led to members making poor decisions, particularly at times of poor investment returns.