Government urged to address advice affordability

In its pre-budget submission to Treasury, the institute said the government should “enable the provision of appropriate financial advice for all Australians at an affordable price” as part of its response to the Retirement Income Review, which noted the significant financial and emotional benefits advice could provide to retirees.

The Actuaries Institute also recommended the government legislate to provide an objective for the retirement system, establish a task force to reduce regulation in super and review areas where retirees needed additional financial support, such as rent assistance.

In addition, the institute said legislation to establish a retirement income covenant – which senator Jane Hume recently flagged would be on the table this year – needed to be quickly finalised to give funds time ahead of the start date of comprehensive income products for retirement in 2022.

“The institute believes Australians should be able to confidently live their retirement with dignity,” the Actuaries Institute said.

“Australians should be able to get good financial advice at an affordable price and funds should be able to confidently develop retirement income products ahead of changes due in 2022.”

The institute also said the government should make a firm decision on the level of SG contribution, following recent debates that have suggested the future increases may be cancelled or made optional.

“The most appropriate super contribution rate is likely to be in the range of 9.5 per cent to 12 per cent, to ensure more Australians live in dignity in retirement,” the institute’s submission stated.

“However, the complex and difficult question which need to be addressed is the level at which compulsory SG contributions should be set. 

“Some of the complex interactions that will need to be considered include the government’s overall objective for the compulsory SG system, its interaction with the age pension, rental assistance and other forms of welfare that support older Australians, as well as whether other assets such as the home could or should be used to provide some income in retirement.”