Retirement income stream sales fall

THE December 2002 quarterly Retirement Income Stream Report released by theInvestment and Financial Services Association(IFSA) has shown a fall in total retirement income stream sales of 13 per cent to $2.4 billion for the period.

According to IFSA chief executive Richard Gilbert, this type of fall should place the issue firmly on the policy agenda.

“With the markets coming off as they have, people are possibly deferring their retirement income date in favour of staying in the workforce,” Gilbert says.

While IFSA has anecdotal evidence of this trend, the association plans to investigate further with their members to fully ascertain whether a trend exists. And if the trend is real, Government will need to respond accordingly, Gilbert says.

“If the money is leaking out of the industry, that could be a policy issue — what we don’t want is money dissipating,” he says.

IFSA has been working with the Government on this issue through the growth pension review initiative, pushing for more flexible income stream rules that it says has the potential to boost private pension take-up.

The report also found that in spite of tough financial market conditions, total retirement income funds under management increased by 2.3 per cent over the December quarter to $45.7 billion, and were up six per cent over the 2002 calendar year.