FSI hoped to be turning point for decumulation: Challenger
One of the Financial System Inquiry's (FSI) greatest victories will be setting a path towards a decumulation framework, according to Challenger's CEO, who said the company has spent years trying to warn Government about the dangers of the current structure.
Speaking to Money Management after the release of its annual results, Challenger's CEO Brian Benari said the most glaring shortfall in Australia's post-retirement space is its poor decumulation structure, something he has faith will be addressed in David Murray's final report.
"We've got a fantastic structure, we've got a great system that was put in place at the beginning of the 90s, the whole reason for that system is to provide income streams for people in retirement, but actually we have a very underdeveloped decumulation structure," he said.
"The system is world-class until we're 65 and then from then on, it's somewhat lacking."
Benari said the fact Australia was the only developed nation with a mandated retirement income system but no formalised decumulation structure was mystifying.
However, Benari said Murray's interim report was "brutally honest" about this shortcoming and finally brought the issue to the Government's agenda.
"Murray's been absolutely brutally honest in his report in respect to the state of our retirement income policy today, frankly he just called it as it is.
"The FSI will be a positive thing for retirees, it will be a positive thing for the market as well and it will be for Challenger because what it's doing is it's highlighting the endemic problems you have in our retirement system today," he said.
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