Inquiries must offer annuities answers
Government inquiries looking into Australia's retirement income woes must consider how changes to the tax treatment of annuities could reshape the system, TAL says.
The insurer said it has used its two submissions to government inquiries, the Financial System Inquiry and Review of Retirement Income Stream Regulation, to call for clarity on future policies around annuities, which it says could significantly reduce the Australians' reliance on pensions.
However, at present regulatory barriers are still inhibiting the uptake of products like deferred lifetime annuities.
"We strongly support the recognition by these two inquiries of the role that life insurers could have in combatting the current and future national retirement income shortfall, and the need to provide the regulatory settings to enable this to happen," TAL Group CEO Jim Minto said.
"TAL strongly supports the provision of incentives to encourage retirees to purchase retirement income products, particularly lifetime and deferred annuities. Annuity income can help retirees plan with greater certainty and flexibility to manage their financial affairs, thus reducing the potential burden on Government funded pensions," he said.
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The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
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