It took big picture people to implement Australia's compulsory superannuation system. And while Australians will have some of their own savings in retirement, a comfortable, let alone a self-funded, retirement is increasingly out of reach for many people, and probably me included.
The global financial crisis has eaten into much of the retirement savings of current retirees, and with the superannuation guarantee still jammed at 9 per cent, the post-retirement challenge remains huge.
Last week, the Association of Superannuation Funds of Australia (ASFA) called for an overhaul of post-retirement products.
Through the Henry review of the tax system, ASFA chief Pauline Vamos said the government should take the opportunity to address some regulatory and modernisation issues to ensure post-retirement products met retirees' needs.
"The current capital regulatory requirements for life companies and the definition of life insurance products have hampered the annuity market. We are keen to see the widest possible range of providers and products to give all Australians choice, flexibility and protection in retirement," Vamos said.
Already the bigger institutions are gearing up to meet this challenge.
Macquarie Bank announced the establishment of a group that will focus on developing longevity risk products, Challenger is boosting its annuity business and Deutsche Bank is also gearing up to target the post-retirement market.
Superannuation funds are also gearing up to meet the needs of members who are now facing the de-accumulation phase of their retirement.
Demographic changes also confront the industry.
Vamos noted that in 20 years, for every person retired there would only be two or three people working and therefore retirees must be able to contribute to the economy.
"Happy retirees who have enough money to live healthily are more likely to be less reliant on the health system and to actively participate in the economy by continuing to spend on consumables," she said.
I for one hope to be a happy retiree one day. Given my current purchasing habits, I certainly won't have any problem with spending up on consumables well into retirement.
Let's hope we have some big picture people to take on this next challenge.
