Superannuation funds are avoiding the implementation of lifetime pensions for a variety of reasons, including their tendency to be reactive to regulation change rather than proactive.
Speaking at the Post Retirement Australia conference, Peter Rowe, general manager of Optimum Pensions, said super funds had a massive amount of regulatory change which meant their priorities were always in a state of flux.
“The regulatory change keeps hitting them year after year and I think it’s taken them a while to start actually contemplating what they should do about retirement,” he said.
“But I think that’s now changing as I think the hesitation has always been around other distractions and [retirement] hasn’t reached the top of the list of priorities.”
Another reason for the reluctance in take up, said Rowe, was because many superfunds had been involved in merger discussions that prevented them from introducing a new product.
He said a few funds have said they would wait until the government legislated for lifetime pensions.
“And I think that’s unfortunately a sad thing about the superfunds that legislation has driven this whole industry,” said Rowe.
“Without the compulsion of [superannuation guarantees] most of the industry [wouldn’t] exist – we’d go back to the days where we only have 30% of the population covered and most of that was in the public sector.
“They’ve been conditioned over the years by governments with changing rules to wait to see what the rules will be and I think that’s been one of the biggest impediments.”