Government pushes ahead with plan to simplify retirement

The Federal Government wants to make it easier for people to understand retirement.

Plan to simplify retirement

The Federal Government has released a consultation paper on Retirement Income Disclosure, which is aimed at helping consumers maintain an appropriate standard of living in retirement.

The paper proposes a range of measures to help consumers assess how a retirement income product aligns with their own preferences in relation to potential income, flexibility and risk management.

Choosing an appropriate retirement income product necessarily requires consideration of trade-offs between income, flexibility and risk management. However, it is rare for these trade-offs to be made explicit in product disclosure documents.

Product disclosure statements rarely include information about levels of expected income or cash flow in dollar terms, the likelihood of money running out under certain withdrawal or drawdown strategies, or the likelihood that income would be lower than expected.

The Government will present this information as fact sheets to better enable retirees to compare products.

The paper sets out how the options for these metrics and features could be presented, in order to help consumers make decisions and improve transparency in the industry.

“These fact sheets will cut through to the key features that matter when making retirement income decisions,” Assistant Treasurer Stuart Robert said in a statement.

“Currently, when people approach retirement they are confronted with complex legal and financial information, and long and complex documents.

“Typically, these documents do not provide clear information on the expected level, variability and duration of retirement income. This paper proposes an easy to read and understand document to supplement existing documents.”

In addition to the consultation paper, the Australian Government Actuary has produced a technical paper outlining the retirement income risk measure and the method of calculation.

Do you still find retirement income products confusing? Are you glad the government is doing more to make the options more easily understood?

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    COMMENTS

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    12th Dec 2018
    10:20am
    It is hoped that the consultation paper addresses the need to stop stuffing around with super funds and associated things such as dividend imputation and negative gearing. Super funds need a set of rules that are not only acceptable to all but can only be changed with 2/3rds of the Parliament as well as 2/3rds of the Senate agreeing to a change.

    Politicians must realise that planning for retirement doesn't start the day before one turns 67 but is a long term planning exercise. They live in a different world to the average voter in that their remuneration is heavily subsidised with expenses that others don't get in their workplace. Most politicians will retire on a non-contributory pension plan as well as being offered seats on boards. They have no idea how ordinary people live.
    MICK
    12th Dec 2018
    11:09am
    Rules are never acceptable to "all". It depends on perspective, needs and attitude. The current government has decided retirees are fair game and the last 6 years bear testament to that.
    You've hit the nail on the head about long term planning for retirement but miss the point that destitute governments will come after whoever they choose.
    Karl Marx
    12th Dec 2018
    11:21am
    And their choice is the easiest of targets. Retirees, unemployed, those with disabilities etc.
    Anonymous
    12th Dec 2018
    12:17pm
    Good one, MICK. What do you mean by "the current government has decided retirees are fair game"? Do you have any examples to share with us? You see, MICK, it's not that I support a particular side per se, it's just that this forum has a lot of people who choose to make statements without proof. I note that you have chosen to look back and not look forward at the DI proposal that will severely impact SMSF owners.

    You talk of destitute governments when it's always Labor that cannot deliver a budget surplus with their spending sprees. Today we read that the CFMMEU wants to force the Labor party to increase Newstart by $75.00pw which will cost taxpayers about $40M pw or just over $2B pa. Those who spend more than they earn are headed down the slippery slope.
    MICK
    12th Dec 2018
    1:23pm
    You've turned it back into a us vs them OM. Whilst I am always guilty of this I do so because I refuse to comply with the class war being waged. You never discuss the targets who cannot play the game because. Poor people can vote Labor and hope. Rich people vote Liberal and make contributions to the campaign. Its not ethical and not fair!
    Ok....lets play. Proof, proof and more proof. Fair enough but if you play that game YOU also need to provide proof with any statement you make.

    As a starter lets get your side of society right. Wealthy people are ALWAYS 'victims'. They always cry wolf as they exclaim the end of the world for them and the country. Listen to employers when the destitute get a $10 a week wage rise which does not even cover inflation.

    Labor cannot deliver a surplus? Fair comment but Labor actually does something for the country other than give the rich tax cuts. Sure your lot are into infrastructure, I'll give them that, but what else? Where are the Medicares (they want to kill that), the NBNs (they have ruined that), universal superannuation (where no employer increases have been for many years), etc. The LNP has stopped the boats but fails to address airport arrivals and high immigration numbers which will in time turn us into another India.
    And of course you need to confront the fact that the LNP has run up the debt to $600 billion when Labor left $148 billion. To avoid the usual denial please take this up with the ATO which claims the debt is only $513 billion (at 30 June???).

    Newstart? How do you expect Australians to survive? Do you not understand that inflation is rampant despite the highly doctored official figures. Go do the weekly shopping, look at your rates, your house home insurance, your health cover premium, the cost of tradesmen and professionals and a whole pile of other costs. Of course Newstart needs to rise. So do the wages of other working Australians. Its not rocket science!

    Your delight in quoting the annual cost of things never seems to extend to things like tax cuts for the wealthy let alone company tax cuts which they cried about for weeks because they could not add that bill onto the national account.

    Instead of posting LNP lies you need to create a balance sheet and compare both sides of the casino better known as government.

    Do I support the left? I guess so. Not Labor but many of their ideals. Why? Because I am not a morally destitute rat trying to rape other citizens and take everything from them so they become poverty and handout dependent which then makes them slaves. What is your position in this? Do you have a soul or are you one of the rats who care about nobody other than number one? I suspect I know the answer but in all fairness I'll give you the benefit of the doubt. Cheers
    Anonymous
    12th Dec 2018
    1:37pm
    Gee MICK, some truth, some lies. You have no proof that anyone wants to kill Medicare, just another scare tactic. As to the $600B debt lie that you are fond of spreading, I have shown you proof time after time that the figure you quote is wrong but you continue to lie. The truth about the debt is that Labor overspent by $196.6B and left a debt at the 2013 election of $174.5B which the Coalition increased to $341.0B as at July this year. Here's the link (again)

    https://theconversation.com/factcheck-has-australias-net-debt-doubled-under-the-current-government-100819
    MICK
    12th Dec 2018
    2:49pm
    OM - you are cherry picking and picking figures which best suit your argument.
    Is Gross Debt not what Joe Hockey used in his calls for "budget repair", the one working Australians were called on to service.

    Making sense of debt figures is a bit of a lottery. The Debt Clock link:

    http://www.australiandebtclock.com.au/clocks

    According to this source total government debt is $670 billion at this very moment. That conflicts with the figure I have been using which was sourced earlier in the year.

    Another link:

    https://en.wikipedia.org/wiki/Australian_government_debt

    According to Wikileaks total government debt in April 2017 was $552 billion. That agrees with the debt clock given it was the figure for 20 months ago.

    You do not want the truth OM. Labor never overspent. It actually produced outcomes other than Royal Commissions into their political opponents and tax cuts for their mates. There is a difference.
    TREBOR
    12th Dec 2018
    10:36am
    Government(s) have no interest in makinf the current retirement scheme easier - it took a long time to build it into the mess that it is, too many people would lose out with jobs and profits if it was rationalised and made simpler all round, such as recovering the Stolen Contributions, adding to them the ongoing strands for social security as since forever (Menzies 1940's), returning the current Future Fund as a start on a National Futures Fund for all, and simply adding to the pot as required as Menzies determined ever so long ago. Those with the extra can add to the fund up to a limit (as now with super - should always have been but the thieves have flown), so no problem there....

    It's a bit like the episode of Yes Prime Minister, when the PM says he wants to get rid of tobacco for health reasons, and the Minister lays out for him all the reason it is simply not possible... the economy would collapse, thousands would be thrown out of work, the stock market would fall, and so on.

    Think of the flow-on effects of scrubbing the current mess of profiteering from retirement funding .....
    GeorgeM
    12th Dec 2018
    9:26pm
    I agree with much of what you say, the Govt is NOT interested in Retirees.

    On the surface, such a Disclosure document should already exist, hence nothing wrong with having that other than the Super companies will use that to jack up their Fees! The real motive of Govt, I believe, is to make Super companies offer new Annuity Products (as previously flagged by them) with low returns and high profits for companies, however they can't do it till there is an instrument for the customer sign off and take responsibility for their own financial destruction!

    If they were really interested in the Retirees, it would be far simpler:
    a. Scrap the current completely messed up Pension System.
    b. Reinstate the Future Fund with ongoing input of money collected from the 7.5% Income Taxes being collected - Independently managed away from Govt hands.
    c. Pay Universal Age Pension - to all of Age 65+ and Residency of 15+ years, without ANY other tests. The rest could be still be assessed with a scheme to pay a lower subsistence allowance, This removes a carrot for Migrants coming here late.
    d. Maintain Super benefits (taxation, etc) with caps on Benefits.
    e. Tax all Income, with exemption for the Age Pension and limited Super Benefits.
    f. If any Revenue concern, there is always the Simple Option of imposing Minimum Taxes on Gross Income, reduced by NO Deductions other than Local & Genuine Costs only.
    We can seriously reduce the role of Centrelink & cut Budget costs as well.

    More ideas? How about Nationalisation of all Resources? Stop Foreigners buying up Land here, etc, etc. Who the hell are these Politicians working for?
    We need new, radical thinking Leaders who can think straight & keep it simple, and actually work for the people.

    At the moment, all we can do (to be heard) is to TURF OUT all existing MPs by putting them last in preferences. Change won't be achieved in one step, but we all need to join together and resolve to make this start now.
    Karl Marx
    12th Dec 2018
    10:26pm
    Agree George. Government should adhere to my work & life rule I use. KISS, keep it simple stupid.
    TREBOR
    12th Dec 2018
    11:24pm
    Seems we are on the same page.... I think, from history, that makes us the equivalent of Castro in Cuba... but that's not relevant.

    The simple truth is that at the bottom, there are some men and women of good will who actually give a damn about this nation and ts people - and are prepared to put them and it first in a rapidly darkening world of over-population and globalised thievery, which maintains, despite the evidence, that 'trickle-down' will work to lift everyone a step or two higher.

    The reality, as we know, is the opposite actually happens.

    Unless we, as a nation, are strong and independent, we cannot help others... so immigration must cease.

    Lots of good ideas there, George - I'll think on them...
    GeorgeM
    12th Dec 2018
    11:50pm
    The Yellow Vest movement may be coming here sooner than we think...(it included Pensioners there).
    Old Geezer
    12th Dec 2018
    10:57am
    I must be missing something here but how is this beneficial to anyone?
    Karl Marx
    12th Dec 2018
    11:42am
    It's not OG.
    Old Geezer
    12th Dec 2018
    11:47am
    Seems to me just another way for super funds to make themselves more money with nothing in it for the person who owns the super.
    MICK
    12th Dec 2018
    11:06am
    "......consideration of trade-offs between income, flexibility and risk management."

    This statement needs to be taken into consideration with governments attacking retirees as well as commercial choices. The unprecedented ongoing attack on boomers has been relentless and what is needed is a fair system which recognises ans rewards (up to a point) those who have tried to plan for their own retirement. Currently the mentality is 'what can we do to shake out money' from retires Australians.
    As I have indicated on a number of occasions it is only a mater of time before the family home is used as the next assault.
    I wish Australians were as militant as the French! We need some anger rather than lamenting.
    Anonymous
    12th Dec 2018
    12:22pm
    Again, MICK, scare tactics about the family home. Neither side of politics has ever made any comment that could be construed as thinking about including the family home as an asset when assessing the age pension. Every year bureaucrats are tasked with suggesting savings and they invariably bring up this idea and every year, whichever government is in power, the idea is knocked down; not put on the back burner, not left for further consideration but completely reused.
    KSS
    12th Dec 2018
    1:22pm
    Violence and rioting is NEVER the answer Mick.
    MICK
    12th Dec 2018
    1:30pm
    No scare tactics in any way. The fact that the family home keeps coming up for discussion over the years points the way. The only impediment is not having the numbers in both houses. If they had that there would be no more discussion. We both understand how it works.

    KSS - you are incorrect. Totally. The French riots over the past couple of weeks extracted significant back downs from rich man's president Macron. He currently has his tail well between his legs....and the protests are far from over.
    If you think this is luck go back to the French Revolution. The ruling class would never have believed their own would have been guillotined. They were. And decidedly deserved!
    Our own rats playing the class war need to take note. Australian may be apathetic but like a bushfire it only takes the right spark at the right time and its on. The LNP need to beware as their arrogance belies what may occur if they keep playing the rich man's card.
    KSS
    12th Dec 2018
    3:39pm
    Then let's hope the violence and rioting you applaud so much reaches your street and your home Mick. Seems you would be perfectly fine with that outcome.

    And you talk of class warfare. Your Mr Shorten is a master of that game along with his left wing politics of envy!
    MICK
    12th Dec 2018
    4:30pm
    Applaud. No.
    I recognise that when people are oppressed there is a point in time when the game is up. You seem to be frightened of that. I wonder why.
    My talk has nothing to do with Shorten. Yours has everything to do with your rich man's government governing for you. There is a difference.

    Class warfare? So you give the rich a huge tax cut and then try to run through company tax cuts going to the same people whilst at the same time nailing wages down despite fast rising prices and you say Shorten is conducting class warfare.
    Please go out onto the streets and tell somebody who believes that lie.
    Karl Marx
    12th Dec 2018
    11:40am
    Article is a load of rehashed rubbish. Won't benefit retirees one bit. Just another propaganda exercise to look like the government is doing something.
    If they were serious then they would be looking at overseas models like in NZ or Europe.
    What about retirees who don't have sufficient funds for so-called "income products"
    Just another waste of taxpayers money
    Basically our pension model is broken. to complex & penalises those that work hard & save. The pension is that complex that even the staff that run the system & making the decision on our pensions can't even come up with the same interpretation.
    GeorgeM
    12th Dec 2018
    9:30pm
    Agree with your comments. See my full response above regarding the Broken System.
    Blinky
    12th Dec 2018
    12:05pm
    They encourage you to build a super fund, so they can then take three bucks off you for every one yhousand dollats over the very skinny asset test. In other words they are fleecing retirees who managed to put some money in their super. I'd like to know if politicians also take 3 dollars off their fat supers???? Of course they dont, super and pension rules only apply to the peasants!!!
    KSS
    12th Dec 2018
    1:24pm
    Politicians do not 'lose $3' because they do not apply for the age pension!
    MICK
    12th Dec 2018
    1:31pm
    Always expect a destitute parliament to come after easy marks who they can steal off. That's in their DNA.
    Charlie
    12th Dec 2018
    1:59pm
    They called it a product so that must mean you have to pay for it.
    Too late for me I already past retirement.
    GrayComputing
    12th Dec 2018
    5:26pm
    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Now is the season for discontent, so do something about it!
    It is time to kill off this insane hugely expensive pensioner whacking bureaucracy.

    It is time for all of us (yes that means you) to rant at our MPs and Senators daily to take action for human decency and a huge stress reduction for pensioners

    NO ASSET TEST FOR A PENSION EVER AGAIN!
    A pension is not welfare.

    Most economist say we will save taxpayers money by dropping asset testing because of the massive overheads cost in running Centrelink and the 10,000 conflicting rules.

    Hiring more Centrelink staff will only increase taxpayer’s costs for processing the creeping insane red tape monster system politicians and well paid bureaucrats have created.

    Help scrap it now. Become a hero.

    Even poorer New Zealand has a NO ASSET pension so it is cheaper and user friendly.

    Why worry that few million$ earners get it too. That is peanuts to them, not enough for a good vintage champagne.

    Do retired and retiring people really look forward and want 100++ visits to/from Centrelink and be part of 3 million waiting queues and lost calls?

    We all (that means you) need to tell our MP and senators every day that these criminal asset tests for a pension must be dropped now.

    12th Dec 2018
    6:22pm
    Load of hogwash! The government is DOING NOTHING to make retirement simpler. There IS a simple and sensible way to make retirement better and to save taxpayer dollars - and that's to reform the IDIOTIC pension system that rewards people for manipulating to appear poorer and punishes people for being self-funded. Stop the propaganda and BS and FIX THE MESS.


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