IGR shows longevity risk 'urgency': Challenger
Challenger has used the 2015 Intergenerational Report (IGR) to argue for the need of longevity product reform, and said the report stresses the need to offer members retirement income products with longevity protection.
Challenger chief executive officer Brian Benari said Australia's annuity market comprises 0.3 per cent of gross domestic product compared with more than 15 per cent in the US, and said Australia has to catch up in providing longevity risk protection to super fund members.
"We need to urgently level the taxation playing field to allow the introduction of deferred lifetime annuities, which will come at no cost to revenue, and has bi-partisan political and wide industry support," he said.
Benari also said he expects support to implement the Financial System Inquiry's recommendation for super funds to offer members retirement income products with longevity protection.
Last year, Challenger backed calls by the FSI for super fund trustees to be required to pre-select a comprehensive income protection product to members' retirements to ensure they do not outlive their super savings.
Benari said the Australian baby boomer generation is four years into the retirement stage, and the population of those over 65 will more than double to 22.6 per cent over the next 40 years.
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