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for Retirement Overhaul
29 July 2003
Australians would be encouraged to change to part-time work before retiring and opt for pension-like superannuation payments under an overhaul recommended by a Senate committee.
committee has recommended a move away from superannuation being paid in
lump sums, and suggested programs to help older Australians plan for
new system could promote growth pensions - retirement income based on
investment portfolios, including shares.
pensions have fixed terms based on the recipients' life expectancies, with
a set amount of income paid every year.
a report, the committee said the government should urge people to move
away from lump sum superannuation payments, which offered restricted
access. This would ease restrictions on interest-based investments with
mandating the use of a proportion of superannuation savings for the
purchase of a genuine complying annuity on retirement in Australia, the
committee majority believe that life insurance offices and other providers
will re-enter the annuity market, and offer a range of new and different
products to retirees," the committee report said.
well, the federal government could expand retraining assistance programs
to older workers, and reform benefit schemes to help people plan for
retirement, the report said.
proportion of Australia's population aged 65 and above is forecast to more
than double to 26 per cent in 2051, from the current 12 per cent.
chairman John Watson said there was a need for reform.
and economically, Australia would gain enormously from promoting a more
progressive transition from work to retirement," he said.
member and Australian Democrats superannuation spokesman John Cherry said
people should be encouraged to take more of their retirement savings as
annuities rather than lump sums.
Investment and Financial Services Association chief executive Richard Gilbert said he wholeheartedly supported the findings.