14 Feb Australia ranks sixth on global retirement wellbeing index
Natixis Global Retirement Index has ranked sixth for the third year running.
Just days after Scott Morrison announced he would scrap the government’s policy to raise the pension age to 70, Australia has been ranked sixth globally for retirement wellbeing.
The nation maintained its position in the Natixis Global Retirement Index for the third year running due to improvements in finances and despite a decline in the quality of life measurement, coming in just behind New Zealand and the Scandinavian countries.
Damon Hambly, chief executive, Australia at Natixis Investment Managers, said the index showed individuals were shouldering more of the responsibility for funding their retirement, even in countries with a mandatory super system.
“It’s on governments to finance social security systems.
“If people are retiring earlier then there’ll need to be more support from the government. I think there are pros and cons; it’s not a straightforward issue,” Mr Hambly said of Mr Morrison’s backflip on the pension age.
Mr Hambly said Australia’s ranking of sixth place in the index was a good result, but revelations from the Kenneth Hayne royal commission showed the financial services sector needed to improve standards and the quality of retirement outcomes.
“If you look across financial services in Australia, there are pockets where we could improve and we need to work hard to regain the trust lost.
“ If we don’t have the trust of investors they’re not going to invest in their retirement assets in the way we need them to,” he said.
One benefit of the royal commission was it would increase engagement, he said.
But uncertainty in the regulatory landscape had eroded confidence in the super system, evidenced by contributions falling in 2017 as per figures from the Australian Prudential Regulation Authority.
For the 12 months to June 30, contributions of $109.4 billion were down 6.5 per cent on the prior year, while net contribution flows fell 12.8 per cent to $34bn.