Government’s plan to provide retirement stability is backfiring

Government’s proposed retirement income framework is making Australians nervous.

Government’s plan to provide retirement stability is backfiring

The Government’s proposed retirement income framework, which is intended to provide security in retirement, is actually making Australians nervous, says ANZ Wealth.

Writing for ANZ Wealth, financial adviser Troy Smith explains that the Government has been developing a solution that is supposed to provide consumers more choice of income products in order to increase their standard of living during retirement.

However, the Government has since released a number of papers that are confusing advisers, Mr Smith claims. The uncertainty is potentially leading to substandard advice on retirement income, with some pre-retirees missing the boat altogether on intelligent plans, he said.

Among the options being considered by the Government are Deferred Lifetime Annuities (DLA), retirement income streams, the vaunted Comprehensive Income Products for Retirement (CIPRs) and a suite of other income solutions.

The Government has also proposed reassessing lifetime income streams from 1 July 2019, saying existing streams would be grandfathered.

While these plans are intended to provide a steady income stream and manage longevity risk, Mr Smith warns that uncertainty surrounding the various options have left both practitioners and clients uncertain.

“The industry is undecided what the final form of reforms will look like. Some argue that CIPRs will never come into existence, whilst others argue that CIPRs are required to protect retirees from market risk,” he said.

“Either way, significant changes are likely to be made to the retirement sector, which always makes our clients nervous.”

Read more at www.moneymanagement.com.au

Are you uncertain about your retirement income? Are you aware of the Government’s plans to introduce these retirement income products?

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    COMMENTS

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    ex PS
    19th Jul 2018
    11:07am
    The government can not manage its' own budget, but is trying to take on the management of money of people who have actually managed their own budgets to the extent of having a Super scheme that they can live on.
    A bit like putting an active drug addict in charge of a drug rehabilitation scheme and giving them access to all the drugs they want.
    The day that any government has that much say over my Super is the day I withdraw all my money and close my account.
    libsareliars
    20th Jul 2018
    1:12pm
    Agreed.
    MICK
    19th Jul 2018
    11:17am
    Retirement stability? From the current government? Are you kidding?

    The only answer this government has for retirees is get into a retail Superannuation fund and sell your house to live off the capital. The rest is just a shell game for the intellectually challenged.
    Anonymous
    19th Jul 2018
    11:33am
    Or an annuity. Have you looked at the cost of those? A bonanza for the provider, and you'd need millions to buy an income that would come anywhere close to sustaining you - but no doubt you'd lose pension benefits for having bought it!
    MICK
    19th Jul 2018
    11:47am
    When you see a government trying to con retirees out of their home and get them to live off the proceeds as well as demonising the (by far) best performing super funds and push them into the poor performing high fee retail funds then you know you are dealing with big business, not a government for the people.
    Read the above and accept the guarantee for what it is....the next in a long long list of lies.
    Rae
    19th Jul 2018
    1:01pm
    Yes OGR and you can hand over a huge sum and gain a pension and lose all the OAP and concessions which makes it a losing trade now.

    It wasn't always like this . Blame Hockey. No wonder they got him out of the country.

    Just trying to figure out the logic of defined benefit pensions now is beyond advisors.

    Someone on a $100 000 is deemed to have hit the $1.6 million limit when they may only have accumulated $900 000 and regardless of the fact that a $1.6 million lump sum should be generating $160 000 anyway at the current 10% return level.

    Just making up everything as you go along is no way to run a Country or a retirement industry.
    GeorgeM
    20th Jul 2018
    8:50pm
    Yes, Retirement Stability from the current Govt is nothing but code language for How to Transfer Retirees Wealth to Private Businesses!
    sanity
    19th Jul 2018
    11:19am
    Before any Government alters retirement processes they need to take it to the people.
    All politicians must understand retirees who utilise superannuation to sustain themselves in later life have EARNED that privilege through hard work and "going without".
    There remains only one aspect of change and that is - to make no changes. Certainty is how we plan for our future. Not like many politicians whose only aim is to be re-elected.

    NOW - advise us what you are proposing - both major parties - then give us time to digest.

    Then we will inform you of our feelings - maybe even propose some alternatives.
    In the meantime if rearranging how retirees live in the future is governments way of closing off budget failures, then suggest you start looking elsewhere - like the various rip offs centering around Centrelink, overseas aid and immigration settlement.
    MICK
    19th Jul 2018
    11:48am
    You'll only get lies from the current lot. Think "you have electricity prices because of the Carbon Tax". And so it goes on.
    Anonymous
    19th Jul 2018
    1:37pm
    Yes, like Juliar took the Carbon Tax to the people! Oh, and of course there was the mining tax - now that was a winner - remind us again Mick, how much did that raise? What a joke!
    Mad as Hell
    19th Jul 2018
    2:11pm
    Yeah and don’t forget Tony Abbotts “...no cuts to pensions...” guess that wasn’t a “cast iron guarantee” just a “non core promise” or heaven forbid a straight out LNP lie
    Rae
    20th Jul 2018
    1:13pm
    Let's not forget Baird selling the grid for $11 bill after spending $16 bill gold plating it or the huge profits Goldman Sachs made from the Murray Darling Water deals.

    Wouldn't it be good if the ALP and LNP both went the way of the Democrats and just died off to be replaced by honest representatives working for us instead of some bank or law firm or union?

    19th Jul 2018
    11:35am
    The solution is simple: A universal aged pension like exists in other developed countries. Tax income above the pension level. Treat retirees with the respect their deserve and let them BENEFIT from their hard work and frugal living. Stop meddling and trying to deprive them, and then wondering why the stupid thought bubbles designed only to bash and hammer responsible retirees and grind them into poverty are not well received!
    sanity
    19th Jul 2018
    11:44am
    Precisely.
    MICK
    19th Jul 2018
    11:50am
    That is indeed the solution but the reality is that the current batch are agents of wealth transfer from bottom to top. Do you think anything other than a poverty pension would ever come given the past 6 years? And if you believe this lot are done then wait until the election is done should they manage to be put back in by another propaganda campaign from the right wing owned media.
    Read my lips.........
    Alexii
    19th Jul 2018
    12:42pm
    You're right on the ball there, Old GenuineRainey.
    Anonymous
    19th Jul 2018
    1:44pm
    You know Mick, you constantly like to remind us how the Libs have been in power for 16 out of the last 22 years, so everything that goes wrong is their fault. You now seem to be conceding that the libs are a chance next election, and the fault is all because of a biased media. So what you are really saying is that your fellow citizens are as dumb as doggie doo, and can be duped over and over again. I find that Unbelieva-Bill and reminiscent of the wailing and nashing of teeth in the US because their girl Hilary was cheated out of her rightful position in the White House. And the Brits still wailing about the outcome of the brexit referendum - when can you lefties ever accept that you don't have a divine right to power? You have forced political correctness down all our throats, and I for one have had enough of this BS!
    Anonymous
    19th Jul 2018
    6:33pm
    Raphael (yes, I remember - you are not fooling me with you claim to be 'Anonymous'), your right wing BS is sickening. Yes, the media is biased, and the LNP has way too much power due to the support of big business and the rich - whom it pandies to constantly. Labor is always coming from behind because it doesn't have the support of the wealthy and therefore donations to its coffers are always less. It's also a sad but inescapable fact that the working class and welfare recipients (who are Labor's traditional supporters) are not as savvy as the wealthy and are more likely to misunderstand propaganda. (The misinterpretation of the franking credit policy is a prime example!)

    The left isn't claiming ''a divine right to power''. Actually, if anyone is making that claim it's the LNP! And as for political correctness - I seem to recall it was the LNP in power when marriage equality was made law and MT endorsed the idea?

    Personally, I have no time for Labor or the Greens, but I have far less tolerance for the self-serving, arrogant, greedy LNP and their social engineering exercise to drive the upper working class and lower middle class into poverty and restore a feudal social structure. We need them GONE NOW - before they totally destroy everything decent Australians value. And if that means Labor in power, so be it. Right now, I am convinced Labor is the lesser of two evils - despite the fact that I fear their evil.
    libsareliars
    20th Jul 2018
    1:11pm
    Spot on, both times, OnlyGenuineRainey. Well said.
    Rae
    20th Jul 2018
    1:16pm
    Yes OGR for aged retirees and limits on other welfare. Say 12 months and then a Government job until they get something better. Yes even mothers. Babies are quite okay with carers or at least all mine were.
    GeorgeM
    20th Jul 2018
    8:55pm
    Well said OGR again! Universal Pension is the way to go without any shred of doubt - however I don't see any party supporting that. Labor (with Greens) have also been anti-retirees.

    Only option in my opinion is to vote OUT (by putting them last in preferences) all current seat-warmers to get rid of the current Govt, the non-performing opposition, and also minimise the number of these leeches getting hold of their fat, undeserved, unfunded, untested pensions.

    19th Jul 2018
    12:19pm
    But of course. Everything this idiotic, incompetent Lieberal government touches turns into a disaster.
    Rae
    19th Jul 2018
    12:53pm
    I thought the Government was actively trying to destroy Superannuation and punish savers. Sure seems like it from the effects their changes have made to my income.
    My advice is for this Government to fix up the mess they let Hockey make and sort out the Australian economy before it's totally broken.
    I'm not surprised advisors are being confused. Join the rest of us. None of it makes any logical sense.

    19th Jul 2018
    1:32pm
    Great to see all the usual Leftie trolls out in force on this one! So, one wonders - what would Unbelieva-Bill do about seniors income policy? He has already indicated that he is going to rip off franking credits from many of us - so that will surely help - not! One wonders what else he hasn't yet revealed - then again, he probably hasn't had that thought bubble yet!
    ex PS
    19th Jul 2018
    2:46pm
    The fact of the matter is, everything this government has tried to control or influence has been stuffed up, NBN, Electricity Market, Alternative Energy Resources, Health Insurance, Banking, Industrial relations to name a few, and now they want to get their hands on our Super.
    Being left or right makes no difference if the basic rules of common sense prevail.
    Does anyone really think thoughtless terms like lefty or fascist lend credibility to anyone's argument?
    Anonymous
    20th Jul 2018
    10:29am
    You are so right, ex PS! But it seems some here just aren't capable of thoughtful, objective comment. These constant rants accusing people of being ''lefties'' and ''facist'' only confirm a lack of capacity to make intelligent assessments and comment. And then there are those who constantly wish hurt on others and constantly condemn the alleged ''failure'' of people they know nothing at all about. No wonder the nation is in a mess when so much of the population can't think beyond insulting anyone of a different political persuasion.
    Not a Bludger
    19th Jul 2018
    3:17pm
    What a moaning and groaning lot you are - epitomised by Mick (who clearly has little to do except monster this website) with his (mainly factually incorrect) rants and vitriol.

    Who cares about those rentseekers - too late to change the world - no one listens to oldies ( and neither they should) - you have had your go (and from your unhappy comments apparently didn’t change things enough) - so just keep your head down and carry on with one’s own pleasant and comfortable retirement and let the world go by.
    Anonymous
    19th Jul 2018
    6:34pm
    We could, ''Not a Bludger'' (but you probably are!), if the stinking vile government would stop changing the rules to persecute retirees, stuff up their plans, and make everything progressively harder.
    Not a Bludger
    19th Jul 2018
    6:46pm
    Geez, OGR - you are pretty vitriolic too - hope you had a good today - although I must say that constant changes to super are getting beyond the pale.
    Anonymous
    20th Jul 2018
    10:31am
    Changes to super. Unfair changes to pensions. Broken election promises. Threats to end the aged pension. It just never ends. And they want us to feel more ''secure''? What planet are they living on?
    4b2
    19th Jul 2018
    3:23pm
    Why do they keep changing the rules for superannuation for us. Their superannuation plan never changes!! Why dont they adopt the same plan as the rest of us?
    Anonymous
    20th Jul 2018
    10:24am
    Because they are desperate to get their hands on our money, but they sure don't want to surrender any of theirs!
    GeorgeM
    20th Jul 2018
    8:57pm
    Yes, all MUST write to their MPs asking them to drop their special pensions and be assessed / treated like the rest of us. Else, threaten them that we WILL vote them OUT.
    ray from Bondi
    19th Jul 2018
    9:39pm
    always run and run fast whenever the government says we are here to help, what us unsaid is helping themselves.
    geordie
    20th Jul 2018
    7:35am
    How about getting some good retirement advice from you lot. Everyone is telling us what doesn't work, well what does. (Not holding my breath.)
    MD
    20th Jul 2018
    8:41am
    My guess is you'll draw a blank sheet geordie. My advise, (not worth a brass razoo) is retire when you feel the time is right and regardless of funds or lack thereof learn to live with what's on offer and enjoy the remainder of your life. It sure as hell beats the whinging, moaning groaning and sometime vitriolic lamentations of most this lot - few exceptions aside. Good luck to you.
    geordie
    21st Jul 2018
    10:24am
    Thanks for that MD. two like minded people here.

    21st Jul 2018
    11:30am
    I thought we were supposed to look after ourselves as best we can and the safety net is there for those less fortunate.

    Plan for your own retirement and forget about government is the best way to go for those who are NOT yet retired.
    Anonymous
    21st Jul 2018
    11:52am
    Easier said than done, Noodles. The majority have to rely on at least a part pension. I planned to look after myself, and I should have been able to be very well off, but investment returns fell through the floor. The GST destroyed a lot of people's plans. Superannuation changes have messed with the plans of many. You can't simply ''forget about the government' because it interferes everywhere, and it creates economic conditions that bring the best plans undone.
    Anonymous
    21st Jul 2018
    1:31pm
    OGR as I said my comment was aimed at those who are NOT yet retired.

    They need to take heed of comments on this site from those of us who are retired and make provision for themselves as best they can, as I fear that the pot is getting smaller and numbers of those who want something from it is only going to get a darn sight bigger.

    Less and less workers to pay the taxes. We must get more employed.
    Anonymous
    22nd Jul 2018
    8:44pm
    But Noodles, the government is making it futile to save and ensuring that the strong incentive is to NOT provide for yourself. Unless you can get VERY rich, it simply doesn't pay to have more than modest savings. If the IDIOTS making policy would recognise the stupidity of their policies and start rewarding people for striving to be self-sufficient, we might have some hope for the future.

    As for getting more employed... technology is replacing jobs, and the government's approach is to reward the businesses that exploit this and make massive profits with lower taxes and brand the victims of this change ''lazy'' and condemn them to poverty. We will NEVER get more employed with this approach. We need visionaries with innovative ideas and progressive attitudes in government - and we need to end greed and elitism. That is ultimately the ONLY solution. Bullying won't fix anything, and neither will urging people to do what is against their own self-interest.
    Anonymous
    22nd Jul 2018
    8:45pm
    BTW. Noodles - Australia's expenditure on the aged is HALF that of other developed nations, and predicted to fall dramatically over the next decade due to superannuation, while the costs to other nations will rise steeply. We DO NOT have an affordability crisis. We have a LYING government hell-bent on social engineering to restore the elite to glory and the working class to the workhouse!
    geordie
    22nd Jul 2018
    8:07am
    I totally agree Noodles. The only caveat, that there is a lot of people working part time, casual and cash in hand that pay little or no tax and as you say more and more hands dipping into the pot which just gets smaller each year.


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