Retirement reforms will help millions, and urgent access to simple financial advice will be the gamechanger
The Super Members Council welcomes the Australian Government’s retirement reforms announced today to help Australians compare retirement products more easily and have more options to help them make the most of their super in retirement.
As 2.5 million Australians prepare to retire in the next decade, these welcome reforms will strengthen online information and give people more options for how they take their retirement income. But urgent reforms to widen access to simple financial advice from their super fund will be the gamechanger.
SMC welcomes best practice principles to shape retirement product design and new transparency measures to help retirees identify funds that deliver strong returns and exceptional service.
Access to quality and affordable financial advice is the missing piece in the retirement puzzle, and the promised financial advice reforms must be urgently legislated this Parliamentary term.
Super Members Council CEO Misha Schubert said the retirement reforms would make it easier for Australians to compare retirement products and choose the best option for them.
“These important reforms are a big stride forward to give more Australians more choices in how they start to draw down and spend their super as income in retirement,” she said.
“We want retirement to be simple, easy and flexible. People want to know how much they’ll have when they retire – and the new tools announced today will help.”
“But to give 2.5 million Australians on the runway to retirement access to the simple information they need to plan for retirement with confidence, financial advice reforms must also be swiftly legislated.”
“Advice is the urgent missing piece of the retirement puzzle, and there is a strong shared resolve across the breadth of the sector to see reform progress swiftly.”
Consumer research shows members have a limited understanding of how to get the most out of super in retirement, with less than half confident they understand account-based pensions and annuities.
The Quality of Advice Review Chair Michelle Levy warned advice would remain unaffordable for most Australians unless super funds are allowed to provide low-cost advice that gives their members an accurate picture of how much money they will have during their retirement.
Australians approaching retirement want more information and advice, with new research showing 73 per cent would want advice from their super funds if it were specifically tailored to their circumstances – including their household pension eligibility1.
These reforms announced today are an important first step towards making retirement simpler while encouraging flexibility to meet retirees’ needs. The Super Members Council looks forward to working with Government and the industry on the details of these reforms.
To help retirees further, the Australian Government should also:
- Legislate the Delivering Better Financial Outcomes financial advice package swiftly
- Make it easier for members to switch into retirement products – and end the current ban on being able to add super contributions to a retirement-phase super account
- With member permission, the Government should notify super funds about their members eligibility for pensions and other government supports, so members can be given timely information on how to maximise their retirement income