Super funds must provide flexibility in their post-retirement product and service offerings as individual members’ needs dictate there is no one-size-fits-all, according to Wade Matterson, practice leader at Milliman speaking at the Investment Magazine Post Retirement Solutions for Super Funds conference. While these were the recommendations of Matterson, they were also supported throughout the day by all the speakers who presented research and opinion on the burgeoning sector. New research by Towers Watson, presented by Nick Callil and Duncan Rawlinson, demonstrated the appropriateness of blending different combinations of products, including annuities and the aged pension, depending on individual circumstances.

Fiona Reynolds, chief executive of AIST, reminded the audience of the immaturity of most members’ account balances and the need to provide a top-up to the aged pension, while other members with larger account balances might demand more sophisticated options. Women, also, had different needs that weren’t currently being met. “Members want to move simply and seamlessly into retirement, and expect their super funds to have product options,” she said. An AustralianSuper case study, presented by chief executive Ian Silk, revealed that product development in the sector was in a state of flux.

“There is no clear direction in what is the ultimate solution, there isn’t one,” Silk said. “But super funds can play a role in directing that.” Analysis and modelling of the default option, undertaken by AustralianSuper, showed that members would benefit from an exposure to equities for longer than commonly believed. This was also supported by the research of Michael Drew, managing director of lifecycle strategies at QIC, who advocated an outcome-oriented approach to retirement product development. Another theme was the need for super funds to start thinking about retirement needs in terms of income for their members, and away from talking about assets under management or wealth management generally.

According to Silk, super funds need to move towards a member, not industry, focus. “We need to move from an account-based system to a pension/income system. We need to communicate what money translates to in retirement income,” he said. With this comes a greater need for advice, and SunSuper and UniSuper demonstrated their financial advice offerings at the conference. The presentations of the conference, which was supported by Challenger and Milliman, are available at www.investmenttechnology.com.au

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