Retirement Town Hall ? Australia exemplifies a changing world of ...

By Javier Sanabria

Aging workforces, longer lifespans, and deteriorating global economies have placed the future of retirement systems at risk. In this issue of Benefits Perspectives, Wade Matterson spotlights Australia?s superannuation retirement system as he examines reasons government intervention in pension policies are anticipated moving forward.

Here is an excerpt from his article:

Private industry is already in the early stages of evolving to address some of these problems. The market participants are reacting, driven by the need to provide better outcomes for workers and retirees. Whilst embryonic in many cases, examples of these activities include:

? Greater segmentation of members and their needs, e.g., the trend to review one-size-fits-all investment models (or default funds) in place of developing investment strategies that are more focused on individual objectives and that take a holistic view of members financial affairs.

? Offerings that target these segments, including product, advice and distribution, including the development of lifecycle investment options, personalized overlays and other longevity products (e.g., variable annuities), as well as emerging advice models that range from single-issue advice to intrafund and holistic approaches.

? New models emerging such as self-managed and direct investment alternatives. Whilst this trend has arguably come about in part because of the perceived failings of large institutional pension plans, the trend towards greater control and individual tailoring has been established and many funds now appear to be developing the capability to offer similar solutions to the membership.

Improved efficiency, competition, and choice in the retail provision of retirement benefits could further lessen dependency on governments by creating a more educated and informed member. Armed with knowledge about saving, investing, spending and other retirement planning information, members should experience improved decision-making and outcomes (i.e., mitigate behavioral risks that lead to mismanagement of pension assets).

Pensions Australia, Pensions, retirement, superannuation, Wade Matterson

Source: http://www.retirementtownhall.com/?p=4308

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