It's Time: Here's How to Turn Superannuation into a Retirement Income System
A Dialogue Paper proposing a three-part reform package to help superannuation deliver on its core purpose: income in retirement for all Australians.
More than 1.5 million Australians aged 65 and over hold balances totalling more than $320 billion in the accumulation phase beyond age 65, paying more than $2 billion of additional tax every year as a result.
It's Time: Here's How to Turn Superannuation into a Retirement Income System finds that although Australia has a well-respected superannuation system, various structural and behavioural barriers are preventing retirees from drawing down their savings as intended.
Co-authors Nick Callil and David Knox AM, two senior actuaries with deep expertise in superannuation and retirement, propose the MyIncome package — a practical, three-part reform designed to make drawing a regular income from superannuation simpler and the norm for all Australians in retirement.
Key recommendations include:
- APRA-regulated superannuation funds must offer eligible members a pre-set account-based pension, 'MyIncome', from age 65, with design features set by each fund.
- Retirement income payments must commence no later than age 75 for all superannuation members.
- Superannuation funds must begin collecting and validating members' bank account details from age 60, ahead of the transition to pension phase.
"We do not have a retirement income system. Australia's well-respected superannuation system has helped millions save for retirement. Now we need an equally effective mechanism for delivering that income."
— David Knox AM, co-author
"We need to normalise drawing an income from super so more people can live with dignity in retirement. The process for accessing a retirement income is too complex, so many people simply build up assets in super rather than using them in retirement as intended."
— Nick Callil, co-author
About the authors
David Knox AM and Nick Callil
This Dialogue Paper was co-authored by actuaries Nick Callil and David Knox AM who have collectively over 75 years of experience in superannuation and retirement. Nick was formerly head of Retirement Solutions, Australia at Willis Towers Watson, and David was National Leader for Research and Policy at Mercer.
Dialogue Papers are a series of papers written by actuaries and published by the Actuaries Institute. The papers aim to stimulate discussion on important, emerging issues. Opinions expressed in this publication are the opinions of the Paper’s author/s and do not necessarily represent those of the Institute.
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