On 15 April 2019, we have lodged a submission to the Treasury in response to the draft Retirement Income Disclosure Consultation Paper developed by the government for retirement income products.
Over the last few years the Government has been slowly but surely developing a newer style of retirement income product called a Comprehensive Retirement Income Product.
These products seek to solve the problem of longevity risk.
As part of this ongoing development the government issued in draft form a one page disclosure document.
We believe such disclosure documents need further analysis before being finalised. We agree with the Productivity Commission that newer Retirement Income Products need to be redesigned.
Chartered Accountants ANZ has recommended that the government consider re-drafting the document in order to consider some aspects that do not appear to have been factored in its current design. For example:
- how often does a product provider’s investment team will turn-over a portfolio
- how much of the income paid by all underlying investments from year to year increased faster than the greater of consumer inflation or average wage increases
- a comparison between the income earned on underlying investments of a product and the total fees (investment management, administration, management and regulatory, taxation and financial advice)