Uncertainty about a new government has stalled discussions about amending taxation and superannuation legislation to make deferred annuities more attractive, and could send product issuers back to the drawing board.
"I think if we had a Labor government come back, I think they would be onto it before Christmas, but now we've just got to wait and see what happens," Challenger Financial Services chief executive Dominic Stevens said.
Demand for deferred annuities has been marginal in Australia, because means testing rules and asset classification make these products inefficient.
Challenger had been in discussion with the Labor government about amending existing legislation and Stevens said he had been assured reforms were on the cards.
"[Financial Services, Superannuation and Corporate Law Minister] Chris Bowen, I sat next to him recently at a function at the recent FSC (Financial Services Council) conference. He then said that the government is looking into removing the impediments for the industry to issue competitive retirement products," he said.
"By that he means changing a few rules in tax [law] and the SIS (Superannuation Industry (Supervision)) Act.
"When they were put in there they didn't actually think about the implications for the annuity market."
