In its second submission to the Financial System Inquiry, UniSuper said while it supports the principle of retirement benefit defaults set by trustees, it does not support compulsory defaults set by legislative force through MyRetirement or MyPension products.
“We believe trustees acting under a best interests duty are best placed to develop appropriate retirement products and strategies for their members,” said UniSuper.
“We would therefore support a framework, similar to the insurance management framework, that would put trustees at the forefront of developing appropriate retirement income strategies and products for their membership rather than government-set defaults.”
UniSuper also encouraged the Financial System Inquiry committee to make bold recommendations allowing trustees as much flexibility as possible in developing new retirement products and addressing the needs of members.
“We agree that there are regulatory and policy impediments to developing new products that would be of benefit to retirees,” said UniSuper.
“As it currently stands, the superannuation system is largely a savings system and is not yet a fully functioning retirement system.”
UniSuper also supports long-term income streams receiving policy incentives, given that members forgo access to capital.
“While the nature of the policy incentives could be a combination of tax and social security rules, in all likelihood, the main policy lever available today would appear to be the income stream rules under Division 1C of the Social Security Act 1991,” said UniSuper.
“It remains appropriate for non-commutable income streams to be treated under these rules rather than to be deemed like bank accounts and account-based pensions.”
