This report was prepared for the ICPM Discussion Forum in October 2019 by a group of international pension experts under the Research Committee of ICPM. The report is based on 10 informal interviews of key stakeholders of the Australian pension system primarily conducted on a fact-finding tour to Australia.

This represents The Conexus Institute’s submission to the Retirement Income Review. The Conexus Institute is a not-for-profit entity which strives to improve the retirement outcomes of Australians through a focus on impactful research. This submission was prepared by David Bell, executive director, The Conexus Institute.

The investment goal of an accumulation portfolio is straight forward – return maximisation. Investing in a decumulation environment or investing in retirement is different. Decumulation investing, for the purpose of funding retirement income, is more complex than that required for accumulating assets.

The conventional wisdom is that Australians don’t save enough for retirement. But this belief, encouraged by the financial services industry fear factory, is mistaken. The vast majority of retirees today and in future are likely to be financially comfortable.

Retirement is a recent phenomenon in history and has acquired several preconceptions around a typical experience. This thought-provoking session explores the reality of ageing in the 21st century and the contemporary needs of members.

How to ensure a happy retirement for all Australians? How can we predict people who will age happily? This session will dispel certain myths and draw on research from the Blue Zones, a Harvard longitudinal study and the works of Ellen Langer and George Vaillant.

Dispersion of opinion remains alive and well on the topic of how best to approach accumulation vs decumulation investing, but how different are these two regimes in reality? What does a decumulation investment process look like?

What does the ‘average’ retiree look like? What experiences does the ‘average’ retirement provide? What’s the ‘average’ return needed to fund an ‘average’ retirement? How long does the ‘average’ retiree live?

Australia has a world class accumulation superannuation system but with considerable imbalance across gender, employment type and education. This session will explore what can be done to promote education, adoption of good habits and sharing of knowledge so there is dignity in retirement for all Australians.