More work needed on annuity products
Retirees need more flexible annuity products if they are to continue working into old age, according to partner and actuary at PricewaterhouseCoopers Catherine Nance.
“A product that starts at a certain date, that converts your savings to income, that doesn’t allow you to work a period of time and not work a period of time, and adjusts your savings will not work in the future when we’re trying to encourage people to keep working for a long time in some form,” Nance said.
Nance was speaking at a session of the Self-Managed Super Fund Professionals' Association of Australia (SPAA) conference.
There is very little product in the Australian marketplace to help retirees manage investment, longevity and inflation risk, she said.
Most pensions were account-based, in which all the risk resided with pensioners, which made it very difficult to manage their retirement.
Eighty per cent of current retirees are on all or part of a managed pension, with typical retirement savings of $70,000, while 20 per cent of males and 10 per cent of females had more than $100,000 in retirement, Nance said.
Super funds could be the prime distribution path for annuity products in the future, she said.
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