Super changes will improve retiree living standards

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The Actuaries Institute has welcomed changes to Australia’s post-retirement superannuation system that it hopes will lead to improved living standards for retirees.

The legislation, which passed through parliament last week, deals with the risk retirees may outlive their retirement savings and gives older Australians more financial options in retirement by making changes to the means test rules that will encourage the development of new financial products for retirees. The package of changes also included an expanded Pension Loans Scheme and an increase in the Pension Work Bonus.

“The legislation will help stimulate the development of products that will underpin the government’s objective that superannuation provide income in retirement that supplements or substitutes the Age Pension,” said Andrew Boal, convenor of the Actuaries Institute’s retirement strategy group.

“We support the changes, and also support the principle of requiring superannuation funds to offer a retirement income product to members,” Mr Boal said.

Australians enjoy among the longest life expectancy in the world, a trend likely to continue.

However, retirees are currently offered slim guidance or choice when they take their retirement savings out of the superannuation system. Many worry that they will outlive their money.

YourLifeChoices’ research shows that almost 80 per cent of retirees are worried that they will outlive their savings and members articulated those fears in last year’s Retirement Affordability Index.

“Since the early 1970s, the life expectancy of the average 65 year old has increased from around 12 years to 20 years for men and about 22 years for women,” Mr Boal said.

“But longevity is not uniform, it varies considerably from person to person, so some form of longevity protection will be helpful for many Australians.”

Mr Boal said the Actuaries Institute has been concerned for some time that the retirement phase of the superannuation system was underdeveloped.

“We support the progress that has been made to remove barriers to the introduction of pooled lifetime income products, and we welcome the clarification of the treatment of comprehensive income products in retirement (CIPRs) under the new Age Pension means test rules,” he said.

“We also support the government’s plans to prioritise the development of a retirement income covenant, and that all superannuation funds should develop a retirement income strategy for members.”

Mr Boal said income needs and spending patterns in retirement can and do vary significantly and there is no one-size-fits-all solution.

“We strongly support the notion that trustees should consider eligibility for the Age Pension when considering a member’s income in retirement, and also how cognitive decline may affect outcomes.”

What do you think of the government’s changes to lifetime retirement income products? Will it improve your living standards in retirement?

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Written by Ben


Total Comments: 49
  1. 0

    Lothario, which rock were you hiding under? Here is the real truth of how Retirees never had it so good, or is just a few cheating weasels that have worked the system having a good time?.

    The greed of the present government in clawing back every cent from pensioners/retirees knows no bounds. I’ll give my personal experience in a moment. First, let’s see where the Morrison Coalition wants to spend money. Luckily, the big end of town ‘s popularity has been trashed and taxpayers will not be forced to pay for the rich and well-heeled “business people who do FA to enrich the economy but rape and plunder the environment.

    So what sounds good? Here is the government spiel.- Yes, the yellow hords are upon us and will invade soon. Yes, Islamic State will conquer the world and contaminate Australia. Yes, the Ruskies are planning world domination, as if the present population doesn’t already control a land mass 4-5 times the size of Australia, Yes, there must be other enemies not yet identified but we must be prepared for.

    Our response (politically a safe and vote winner and misunderstood reaction), bolster our fighting forces and call it defence spending exercise. What a joke! Our perceived enemies must be laughing their pants off. Let’s rip $50 billion (conservative) from pensioners retirement income to buy 10-12 conventional submarine future rust buckets that if we’re lucky could sink half a dozen fishing boats, coming to our shores. If you spread these along our coastline, they will be so far apart, we might lose a few accidentally, and that’s in peace time, let alone war time.

    Totally inadequate for our defense you might ask, your right, so let’s rip off more money from taxpayers and buy 100 or so F-35 jet fighters, so badly designed, only a few have been able to take off without crashing, at 35-40 million each that’s another cool 4 billion plus. What, you say, pay for planes still on the drawing boards? Why not it’s for our defense, Also let’s build infrastructure, and connect two donkey regional towns with 4 lane road links, so a few farmers can get their produce to market 1/2 an hour quicker., But, But, you ask again in disbelief, won’t that get political votes for the country/national party?.

    What happens with flood mitigation? What are we doing about climate change? What are we doing to mitigate bushfires? No votes so no plans. What are we doing with all these Royal Commissions? No votes so no action. But they buy the Government time. I can name five Commissions currently underway. So what does the present government do about those that have made recommendations? You guessed it – nothing. In fact missing valuable parliamentary sittings days, paid for by the taxpayers is a crime of stealing money and yes, ScoMo is a white collar criminal as a result.

    Here’s how the government weasels its way along to make brash promises that win votes and how it funds them.

    If you have scrimped and saved all your life, worked two jobs, with wife working two jobs as well as bring up three kids and putting them through college, then university, saved like the earth will cease, paid off the mortgages as soon as possible paid four lots of taxes for the best part of thirty years, then at the end you would have enough savings for retirement. Or so you hope. The reality bites. The part pitiful pension was scrapped by that lying, Teflon coated ScoMo, who like Trump, blames everyone except himself for the country going south big time. Why do I call him a conniving liar? Because I’ve seen him deflect unpleasant questions and will never answer a question where he or his government have stuffed up, or trumps up the old question of asylum seekers causing all this misery, and after 5 years in detention, wonders why male only dominated prisoners rebel or simply go mad. The majority have done nothing except seek a better life from oppression and brutality. Yes, they have jumped the queue in some cases, not understanding, that had they been able to afford plane travel, they could have been processed and in Australia legitimately in 6 months. What a joke Mutton head, your maker will reserve a special place for you (perhaps on Manus Island) when your time comes. By the way, I have worked on Manus Island in the 60’s, and the island is beautiful to look at on a postcard, but to live there, no way. You cannot wear heavy clothing because of the 98% humidity and heat, but if you don’t, mosquitoes, swamp flies, sand flies, cane toads, lizards, snakes, and other flesh eating bugs as well as malaria, dengue fever will soon change your mind the place is idyllic. Back to the real world:-

    The wife finishes work at age 71. Fit and healthy up to this point, but within 2 years her healthy is so poor she needs constant 24 hour care and attention. Only solution is an Aged Care Home. Found one that provides decent care and has reasonable surroundings and attitude after a short but horrible experience with a “cheaper” place. At this point, my head is spinning as our whole life is changing rapidly from stability to ever increasing worries with payments. She is totally disabled now but is not covered by disability insurance I was told. She’s too old at 74.

    You would think the government would be helpful after cutting our part pension. Our outflow towards the Aged care Home is extreme, I mean $7,774 per month, more than triple our income per month, and guess what- the government deems us to be well off and charges $2,600 per month included in the above figure or more than 1/3 the cost. Why? We get nothing from the government, we pay little taxes, but we earn bugger all. All this money is coming out of hard won after tax savings we fought tooth and nail for. And you think that’s fair Mr. ScoMo. Where are our millions we paid in taxes over our working life Mr. ScoMo?, I hope it’s not another jet plane or useless submarine. Can’t wait for the elections to boot this scum out of existence.

    • 0

      I am sorry Jo.

      It hasn’t been a bit fair.

      I too raised three kids as a widow and paid high taxes, my own childcare and paid into Super to be shafted by the LNP and Greens with no recourse.

      Aged care should come under Medicare. The costs are outrageous.

      We need all these Parties and politicians gone.

    • 0

      Jojo besides losinf the Falcons , how do yo know all this military knowledge that Collins class subs are obsolete, they may be. How do you know that F35 strike aircraft are not worth the money, although they might be, its called preparation.
      If you don’t have it then you could be in trouble. Thats the world we live in.

      I am not so sure that we are told everything IN FACT IF WE ARE ALL EXPERTS ON OUR DEFENCE SYSTEMS THEN SO’s EVERY ONE ELSE. , the delivery by France I guess of new submarines is looking like a miscalculation and indecision in time , BUT, what we’re told and what is happening in actuality I would guess is totally different.

      The public don’t know and maybe we shouldn’t know , I would guess in our situation we may be much more defended than Mr and Mrs AND Ms, of Australia have no idea, I find it strange talking about super changes and pensioners and running out of money as we get older irrelevant if we have no defence systems?
      I wouldn’t be jumping from one scum to another scum by the way.

      We might even be a bit like our allies Israel, in as much as a small nation with a small population surrounded by enemies still keeps every one very frightened of them. Never know ?
      Although they should fix the unfair Palestinian problem , but that’s another story.

      Every one worries about running out of money before they die, and every government that will get in, or ever has got in, should have made that scenario impossible to occur years and years ago.
      If you think Bill or an independent can help , think again, the Greens and the ALP are becoming the job killers of Australia.
      The lunatics will really be in charge.

    • 0

      “Yes, the yellow hords are upon us and will invade soon. Yes, Islamic State will conquer the world and contaminate Australia.”

      The yellow hordes have invaded already, judging by what I see in Sydney; them and the Indians. Islamists won’t conquer the world – the Middle East will be nuked before that happens – but they are causing trouble worldwide.

    • 0

      You might have a point Knows-a lot.
      Funny you mentioning ‘Australian’ citizens from India. Last night’s News saw a decent sized protest in Sydney where our Indian born cohort were backing the Indian government. I had to ask myself if these people were citizens of Australia or India. If the latter what are they doing in our country?
      I can hardly wait for ‘racism’ wielding posters demanding retraction or removal.

    • 0

      MICK it could get very nasty fast in rural Australia if the new Australians from India don’t stop treating Indigenous Australians as lowest caste. Mumblings and mutterings and verbal clashes are cropping up in Dubbo. There needs to be education programs to instil that the caste system must be left in India where it has managed to keep hundreds of millions in poverty and prevented the development. Todays Indigenous young aren’t going to wear it without a fight. There is racism and then there are cultural clashes as well. We don’t need either.

    • 0

      And that female genital mutilation is not on for the muslim population.
      We have serious problems which are mostly kept under wraps and all the government and mainstream media does is hush it up and sweep it under the carpet lest unhappy Australians call enough. Its the sort of thing which sparked the Cronulla riots which started because of islamic thugs on the beach closing the rock pools off to users who were not of their faith.

  2. 0

    Do I detect a touch of bitterness? Hmmm? You are lucky! We missed out on even getting the part pension!

    Save and scrimp and do without, so that we could live reasonably with some small government support, so that the lying mongrels (Libs and Greens) can lower the threshold so that we do not get ANY assistance – they even took away our almost useless cards. I had saved just over the limit, and they have taken over 6 months just even start to look at our situation. If I tried to spend some to get under the limit, they have said that that will preclude our ability to get a part pension.

    Old folk a soft target? HURRY UP AND DIE is their policy.

    • 0

      Incorrect Janus. Nobody can tell you how or when you can spend your savings yet except for helping others which is apparently not allowed. If you are planning a part pension you should take any long period trips away first. You can also do any renovations or buy new car or appliances.
      A check of the portfolio may very well show you under the limit as markets have been falling bit by bit for a while now.
      Don’t be bullied by Centrelink. They are public servants and need to start acting like it in my opinion.

  3. 0


    • 0

      floss it will help the finance industry grifters and that’s about all. We should tell them exactly what they can do with any of their new ideas to seal our savings.

  4. 0

    This article is interesting in that previous articles have assured us that the majority of retirees are afraid that their money will run out before they die. The truth is out there. Somewhere.

    • 0

      The assumption in this is that retirees keep on spending at the same rate as they always have. From what I have seen they slow down considerably to make the dough last. I guess that is in the DNA of most of us.

    • 0

      Only the savers MICK. It’s usually a life long habit. A great habit though even with the injustice and angst causing changes. OG has it right when suggesting we keep on top of rule changes and watch our backs.

      I’m quite okay but I never thought a government would pass legislation to make changes to those unable to alter anything. The Greens state they won’t do this but they did.

      The poor quality of legislation over the past few years is going to take years to sort out through the courts. Retiring all the experienced public servants was pretty stupid but then I suppose they thought they could get away with a lot of money grabbing. That’s starting to bite now though. There is always a money trail and a timeline.

      The real pity is that billions of tax dollars have been wasted making a very few rich beyond avarice.

    • 0

      That’s what LNP government do Rae. Tax cuts for the wealthy who have absolutely no need of them. Retirees and struggling Australians always pay.
      The irony is that we have economists around the world starting to call for TAX INCREASES for the rich who already avoid tax systems because they have the outs down to a fine art. So far no government is game to do it in fear of the massive reprisal the wealthy would mount.

  5. 0

    Great so we can work longer or borrow more through an expanded loan scheme.
    . Sounds great. But who benefits.

    So far the changes have cut my income by 15% and the concessions and will cut those receiving dividend income.

    I took the advice and locked in an income stream. Bad idea. Very bad idea. With the changes only the Financial Industry benefits and at least if you haven’t locked in you can get out if necessary.

    Buying annuities or income streams from grifters is a really bad idea from my experiences.

  6. 0

    For asset based pensions(allocated pensions) the minimum drawdowns were fixed sometime ago and I think there has only been one review which said there was no need to change
    Perhaps someone can explain why this so despite the increase in life expectancies

  7. 0

    Jojozep you said it all . Scum the bloody lot of them 53 years of working for the pension at retirement. Only to find it stolen by the very people you vote in to take care of it.Ben Hall was a saint compared to these entitled mongrel lieing rorting cheating pond scum. In fact pond scum would have more sympathy than these excuses for humans.lothario you are a clown you spout incredibly unbelievable jibberish just like all the party’s do at election time .your credibility as a fair human being is blown to prices.

    • 0

      Hairy your credibility will be in the bin too mate, which scum are you replacing with the current scum. Hating is of no use, but in our system now we have two things a gutless GG, who should have slammed the actions of ALP led by indies and Greens, and we have a voting population who really haven’t got a clue about what is happening in Canberra or any form of government, only they know and only they will ever know, jojo has blasted the defence systems for pensioners going broke before they die, and I tell you what you just don’t know,
      none of us know.

    • 0

      john exactly what has the ALP done? I thought the LNP has been in power for most of the last 22 years and for the last 5 years in this term alone. It was the LNP with the Greens who have passed the recent changes making life harder for pensioners and low income earners.

    • 0

      Rae, Labor/Ind./Greens/Unions don’t need to be in power for long to run us off the rails.

    • 0

      Rae, Labor/Ind./Greens/Unions don’t need to be in power for long to run us off the rails.

    • 0

      LNP have been cruel and unfair to retirees, but Labor is planning to finish the demolition job – attacking those the LNP forced to become totally self-funded and depriving them of fair tax FOR LIFE as punishment for saving – while pensioners are given TRIPLE handouts no matter how wealthy they are or how they manipulated to be pensioners. Honesty DOES NOT PAY.

  8. 0

    being in small business I had no super but had to invest in shares and allocated pensions, sometimes I worked 24/7 and if I could have had a holiday or day off there would have been no income,why cant thousands of people like me have the same tax breaks

  9. 0

    being in small business I had no super but had to invest in shares and allocated pensions, sometimes I worked 24/7 and if I could have had a holiday or day off there would have been no income,why cant thousands of people like me have the same tax breaks

  10. 0

    What I cant understand is that the RACQ,,Senior magazine is mostly filled with cruise ads to Alaska and beyond , and Rhine cruises ,same with Sunday mail ,now these ads aren’t there unless thousands of Seniors are taking advantage of them,I was ashamed to attend my monthly meeting as the majority of the members were boasting about their Centrelink[funded] holidays as they could afford to because their 2 million dollar houses were asset free



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