Industry must heed call for better pension products
Superannuation funds need to wake up to the reality that Australians are moving from basic wealth creation to active retirement management, MTAA Super chair John Brumby said.
MTAA Super has teamed up with MetLife to launch a retirement income product that guarantees an income stream for life upon retirement.
Brumby said anyone could be a victim of bad timing, as evidenced by the Global Financial Crisis (GFC), and funds needed to be able to provide options to lessen the risk.
"No one can predict whether their exit from the workforce will correspond with a major market downturn.
"However, as we have seen, being a victim of bad timing can be devastating," he said.
"Providing options to mitigate that risk is critical if our superannuation system is to deliver on its goal of providing a relaxed and secure retirement," said Brumby.
Retirees should not have to worry about whether they will outlive their super, he said.
MetLife chief executive for Australia Marc Lieberman said the launch was a response to the inadequacies of current pension products.
"The launch of MTAA Super RetireSafe is a response to the current inadequate solutions to protect retiring Australians from the uncertainty of market fluctuations and longevity risk," he said.
A number of industry players, including the Actuaries Institute, have called for Government reforms to support the development of an annuity market in Australia.
Last month Plan for Life Actuaries and Researchers reported a possible comeback in the lifetime annuity market following 12 months of increasingly strong sales, driven by Challenger and the launch of its lifetime annuity product in 2010.
Plan for Life said trends indicated that lifetime annuity sales could surpass the $100 million mark this year — the first time in nine years.
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