AIST does not have a strong view on the most appropriate agency to publish research statistics, but believes it is important that data collection and publication is independent of the industry and completed by the Government,” she says. Appropriate asset allocation: members need to know where and how their super is invested so they can decide if they have the appropriate asset allocation for their risk tolerance, age, and other circumstances. With male and female life expectancies of 79 and 83.7 respectively, the super industry must not implement and move to defensive strategies too early. The length of retirement is increasing, says Noonan, and it is critical that investment strategies are geared to accommodating and preparing for this. “AIST sees encouraging members to make a choice – even if that is to stay in the default option – as a key ongoing trustee responsibility, and so education and advice resources must be carefully allocated to reach this aim,” he adds.

Member engagement and default design are intrinsically linked: trustees need the flexibility to design their engagement strategies and default options with consideration of their specific memberships’ needs. This may encompass a decision about the level of exposure to growth assets default members have as they approach and move into retirement, says Reynolds. “This linking of education and advice to fund or option design needs to shift from its present focus on product design and factors such as asset allocation and manager selection, to product outcomes in terms of long-term returns and retirement income,” she explains. “Education about the other investment options available within a fund is important to help members to understand what their choices are, and what impact investment option selection can have on final benefits.”

Post-retirement As the population ages, a higher proportion of people are moving into retirement and retirees are living longer on average. However, as the private market for lifetime annuities in Australia is very underdeveloped, the associated longevity risk is largely borne by the Government through the age pension (which provides income to all retirees if and when they have run down their own retirement savings). Thus, AIST argues that the Federal Government create a funded annuity product with genuine longevity coverage by offering an extension of the existing public pension which retirees could access by investing a lump-sum from their retirement savings, says Reynolds. “The delivery of the product would benefit from economies of scale and scope available due to the Government’s administration of the existing pension, its lower cost of capital, and its optimal ability to pool inflation and longevity risk,” she says.

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