The Australian retirement system is working well with self-managed superannuation funds (SMSF) being a crucial part but further work needs to be done to develop other retirement income products to the same level according the SMSF Professionals' Association of Australia (SPAA).
In an address at its Technical Conference in Sydney yesterday SPAA Technical & Policy senior manager Jordan George stated the Financial System Inquiry and Government Pension Review identified that the retirement phase of superannuation was underdeveloped and did not match retirees' risk management needs.
He stated this assessment was of the current state of retirement income products and that SPAA had agreed with the FSI on this assessment but claimed the SMSF sector was faring better than the FSI assessment.
"It is important that the FSI's first consideration is the overall framework of our retirement system rather than just a focus on products"
"In this respect SPAA contends the SMSF sector is demonstrating just how well the Australian retirement system is working and meeting Government objectives by successfully providing income streams to retirees and is leading the industry in doing so."
Jordan stated that about 35 per cent of SMSF trustees are already in pension phase and 64 per cent of retirement phase assets are held by SMSFs and thus the long term adoption of appropriate policy was of importance to SPAA.
He also said the FSI and pension review were opportunities to open up the availability of other relevant retirement income products which should focus on flexible, principles-based approaches and not compel people to adopt defined strategies.