Optimum Pensions – 2018 Industry Report Card
Listens to Feedback for Continuous Improvement
What a year it has been! Optimum Pensions has had the privilege of presenting our retirement income solution to a wide range of superannuation funds and life insurance companies.
We are encouraged by the responses and have used these interactions to further fine-tune the Real Lifetime Pension. Consensus is that we have a product that ticks the boxes for superannuation funds and their members. We are now in conversation about implementation processes and look forward to 2019.
Readily Contributes for the Greater Good
Our founder, David Orford, is passionate about providing Australians with better retirement income solutions. The Orford Foundation has generously supported the Melbourne Business School Orford Initiative, a project investigating key issues within the Australian Retirement Ecosystem, and the Orford Family Trust has supported the Actuaries Institute research into Australian Retiree Mortality.
Invaluable contributions to further development of retirement income solutions for Australians.
Supportive of Industry Peers
Attending the ASFA conference in Adelaide was a highlight of the year. At the conference we launched our white paperexploring the challenges Australians will face as they increasingly outlive their life expectations leading to under-funding in retirement, and enjoyed discussing this with our industry peers.
Optimistic for the Year Ahead
We were encouraged by the Government’s announcement in the May Budget of a requirement for superannuation funds to develop a retirement income framework that would expand retirement income options for their members to meet changing retirement needs. It also announced measures to encourage the development of new innovative income stream products by clarifying how these products are assessed against the Age Pension means test.
Undeterred by New Deadlines
Those outside the industry might be surprised that superannuation fund trustees have not been required to develop a retirement plan for members and offer a wider variety of products. Unfortunately, the upheavals in the Government have put in doubt many of the proposed superannuation changes. We are pleased that the proposal for the retirement income covenant to commence from 1 July 2020 has been maintained even though funds will not have to offer a comprehensive income product for retirement (CIPR) until 2022.
This opens the way for innovative, forward-thinking superannuation funds to lead the way and offer new retirement income solutions before it is compulsory.
Must Try Harder
From a broader superannuation industry perspective, it has been dominated by the three items: the Protecting Your Superannuation Package, which was introduced in this year’s Federal Budget; the draft report from the Productivity Commission into its review of the competitiveness and efficiency of the Australian superannuation system; and the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, the live streaming of which became compelling viewing for anyone working in the industry.
The Year Ahead – Final Comments
2019 will be another busy year for the industry – the new normal. The industry is waiting with bated breath for the final reports from the Productivity Commission and the Royal Commission due in late December 2018 and by 1 February 2019, respectively. Both are expected to generate significant activity. The continued political instability at the Federal level left a number of key superannuation bills in limbo waiting for Parliament to resume in the new year. We can also expect APRA and ASIC to be more active, we have already seen the face of the new APRA with its recent action activity targeting Directors and Executives.