Australia Introduction. Who are Older Australians? WINNER 2014 ALUCA TURKSLEGAL SCHOLARSHIP. Question 10

Size: px
Start display at page:

Download "Australia 2050. Introduction. Who are Older Australians? WINNER 2014 ALUCA TURKSLEGAL SCHOLARSHIP. Question 10"

Transcription

1 WINNER 2014 ALUCA TURKSLEGAL SCHOLARSHIP Australia 2050 Lara Neate BT Financial Group Question 10 According to the treasury, over the next 40 years the proportion of the population over 65 years will double to around 25 per cent. At the same time, growth in the population of traditional workforce age is expected to slow to almost zero. The demographics are therefore changing significantly in the core market for risk insurance products. How is the industry going to adapt to these changes? Describe what the industry should be offering older Australians both in pre- and post- retirement phases of their life. To the extent there are problems with the current mix of government policy and regulation holding back the development of insurance products in this space, outline both the problems and describe the legislative and other changes that need to be made to enable the industry to provide useful products that meet the needs of this sector of the community. Introduction Increased life expectancy and decreased birth rate have introduced a societal challenge a rapidly aging population. The needs of aging societies are complex and require cooperation between individuals, companies, industry and government. The aging population slows economic growth due to the decreasing workforce and lower discretionary spending by retirees, creating a lower tax pool from which to fund increasing government spending on the age pension and health care (Dragan Savic, 2013). To reduce the impact of the aging population, the goal of government and the insurance industry should be to maximise private retirement savings, increase the incidence of self-funded retirement and ensure superannuation savings are used appropriately post retirement (Dragan Savic, 2013). Who are Older Australians? People older than 65 years of age account for 13% of the almost 20 million Australians, with projections suggesting an increase to 26% 28% by 2051 (ABS, 2008). Those older than 85 years currently represent 1.6% of the population but will increase to 7% 10% by 2101 (ABS, 2008). Australians enjoy one of the longest life expectancies, 79 years for men and 84 years for women (AIHW, 2013), projected to rise to 100 years by 2060 (Oeppen & Vaupel, 2002). Winner 2014 ALUCA TurksLegal Scholarship 1

2 As the population ages, the prevalence of chronic diseases increases. Currently, there are approximately 330,000 Australians diagnosed with dementia (Samsung Life Insurance, 2013). Within the next 5 years, it is expected that dementia will be the leading cause of disability within Australia, surpassing cardiovascular disease, cancer, and depression (Department of Health and Ageing, 2006). About 60% of individuals aged over 65 will require at least some type of long-term care services in their lifetime (National Care Planning Council, 2014) Growth of the workforce The growth in the number of people of workforce age is expected to fall from around 1.2% per annum over the last decade to almost zero in forty years time. In 2002, there were more than five people of working age to support every person aged over 65. By 2042, there will only be 2.5 people of working age supporting each person aged over 65 (Commonwealth of Australia, 2004). This increase in older Australians and reduction in the population of workforce age presents a challenge for the health care system as treatment transitions from acute disease to chronic condition. It also places a strain on the availability of labour to provide goods and services and the sustainability of social safety nets (RGA, 2013). How will industry and government adapt to these changes in demographics? The insurance industry has 3 main areas that it can address in relation to the changing demographics of the Australian population: preparing retirees financially for the future; offering an innovative and flexible range of products and extending the duration of healthy, independent living in later life. These products and areas will need to address both the pre and post retirement phases. As life expectancy increases, the retirement systems will need to cater for longer periods of retirement (Dragan Savic, 2013). Preparing retirees financially for the future Retirees who are financially prepared place fewer burdens on social safety nets and require less support from younger generations (RGA, 2013). This requires individual planning, as well as education and innovative products (RGA, 2013). Consumer education Retirement financial planning requires time and effort in making the required complex decisions. The risks related to making decisions about retirement security are complex and can often be unclear. Therefore, individuals require clear and comprehensible education and guidance. There are already initiatives that have been developed in Australia to assist individuals to make informed financial planning decisions such as the Australian Financial Services Council s LifeWise campaign (lifewise.org.au). The problem with many of these initiatives isn t the content but rather the effectiveness. The Actuarial Foundation provides consumer financial education on insurance and retirement planning. Canada created the Financial Consumer Agency of Canada (FCAC) in 2001 to provide financial literacy initiatives with various tools, programs and publications (Generali Assicuranzioni, 2013). As there are already existing resources, industry and government should promote these already existing resources creating awareness and simple ways to access these. The Insurance industry has the ability to provide clear and comprehensible consumer education that is written in everyday language to provide Winner 2014 ALUCA TurksLegal Scholarship 2

3 practical considerations and advice. From a government perspective there is the possibility that financial planning could be taught in schools to create a culture of lifelong savings. Offering an innovative and flexible range of product solutions The insurance industry would need to act as the innovator in the development of new products and services to protect the financial security of its customers. Governments already invest in research and development incentives but as the population ages they will be required to do more to support the wealth protection needs of the population. There are a number of areas that both government and industry can offer products. In Germany, which appears to have been successful so far in addressing the issue of an aging population, the government has aimed at changing the pension landscape by shifting the financing of pensions towards private pensions and capital funding (Generali Assicuranzioni, 2013). Products offered in Germany are many and most have generous tax incentives, for example the Government provides tax deferrals and exemption from social security contribution in order to encourage individuals to convert part of their wage into pension plan schemes. Private voluntary pension products can only be offered by insurance companies. Insurance companies offer insurance products to cover occupational pension schemes of various types and Insurers and brokers provide effective and extensive advisory to consumers when selling their products (Generali Assicuranzioni, 2013). Macquarie currently offers the Macquarie Life Active policy which is an alternative to traditional insurance products. It s a comprehensive all-in-one insurance with severity based benefits, broader coverage and the ability to make multiple claims (Macquarie, 2014). In Belgium, insurance companies offer cover where Term Life, Income Protection, and Trauma are offered all together and the insured person risk and therefore premiums and benefits changes during their lifetime. A possibility of this could be definitions with objective severity criteria when higher ages are covered. Compared to a pay-out on any diagnosis, the risk of deteriorating claims experience is strongly reduced due to medical progress or changing screening behaviour (GenRe, 2014). Another possibility would be the reduction of the sum insured over time. There is large scope to make changes and improvements in the way individuals are able to use their superannuation. As the law currently stands, there is nothing to prevent anyone from accessing all of their superannuation as a lump sum once they reach their preservation age. To prevent lump sum withdrawals and to better plan for an income during retirement, there are requests by life insurance companies for this option to be removed and replaced with mandated income streams. Financial products such as annuities can serve this purpose. Annuities provide a guaranteed regular income stream for an upfront lump sum payment or a series of smaller payments. Retirees receive income over a specified time horizon (fixed-term annuities) or for the remainder of their life (lifetime annuities) (TAL, 2014). Indexed annuities protect this income from the effects of inflation, while deferred lifetime annuities provide an income stream once the person reaches a certain age (TAL, 2014). Deferred lifetime annuities would help to maintain a retiree s lifestyle, but they have not taken off as a retirement investment solution in Australia. This is due to the difficulty financial advisers and their customers have understanding the regulatory complexities governing these products, and how the regulations do not provide the tax benefits afforded to other superannuation products. Winner 2014 ALUCA TurksLegal Scholarship 3

4 The Chinese Government is working to offer deferred tax annuities products, with a pilot scheme started in Shanghai. There are potential future tax incentives and there are a large variety of products being offered by insurance companies (Generali Assicuranzioni, 2013). In the post retirement phase and as the prevalence of diseases such as Alzheimer s and dementia increases the burden on Australia s long term care there is scope for insurers to offer products to help offset the cost of long term care. Long term care insurance products are offered in the UK, USA and Canada. These products are designed to cover long term services and supports, including personal and custodial care in a variety of settings such as the home, community organisation or other facilities. These policies reimburse policy holders a daily amount for services to assists them with ADL s. In Singapore, the Supplementary Retirement Scheme (SRS) was developed in 2001 and is administered by three Singaporean banks. It s a voluntary savings system that complements the Central Provident Fund (CPF), which provides basic retirement income for housing, medical and basic living needs after retirement (Samsung Life Insurance, 2013). Extending the duration of healthy, independent living in later life A longer period of healthy, productive capacity combined with a shorter and less-costly stage of financial dependency will help retirees improve their quality of life and reduce the economic burden on society. Medical research focused on healthy longevity combined with incentives directed at reducing behavioural risk factors will help influence this outcome (RGA, 2013). Behavioural incentives As the private insurance industry increases its role in helping individuals to secure their retirement, there is a reduced dependency on social safety nets. As the Australian population ages, individuals should have secure and fully funded retirement plans as well as individual protection insurance. Government and the insurance industry can both use their marketing power to encourage individual savings and private insurance ownership to fill the gaps of social safety nets (RGA, 2013). Governments can achieve this by building incentives into government tax policies. Insurance companies can develop initiatives by offering products that encourage healthy lifestyle choices. For example AIA Singapore launched AIA Vitality in July 2013, providing participants with the knowledge, tools and motivation to help them achieve their personal health goals. Clients complete in-depth health assessments to understand their current state of health and then receive clearly defined personal health goals and earn Vitality Points. The customers earn more Vitality points and ultimately bigger rewards as they improve their Vitality Health Status. Scanners that can determine BMI and waist measurements or screening of the client s genome could result in being offered a lower premium if you are in better health. Winner 2014 ALUCA TurksLegal Scholarship 4

5 Medical research and technology Both government and industry have a role in supporting research into slowing the progression and reducing the large costs associated with older age disease. Spending on healthcare is estimated to increase to 7% of GDP by 2050 and become the highest area of government spending (Dragan Savic, 2013). Investment into medical research already occurs both in government and insurance companies, including projects that are focused on the elderly population. There has been a recent announcement of a partnership between public and private industry for the BRAIN initiative that may lead to treatments or cures for Parkinson s disease, Alzheimer s disease and other cognitive disorders (NIH, 2014). Consideration must be given to improvements in medicine to include major organ transplantation or other surgical procedures into trauma cover sold to older Australians. Improvements in clinical practices and improved life expectancy, may increase the age people are undergoing certain treatments and this in turn could impact on future incidence rates (GenRe, 2014). Common medical events in the older population such as a fractured hip could lead to additions to trauma products offered to that group. Depending on the total insured amount, a partial payment can be appropriate for such events or assistance services could be added as well. To balance this, conditions seen as disorders of the young could be removed from the cover (GenRe, 2014). Claims occurring in the older population is likely to result in multi-morbidity. This can complicate claims management as it s not always clear which disease caused which physical limitation. A possible response is to price for a lump sum disability benefit or a long-term care cover based on an ADL s definition. Long term care is one area of concern and the rising incidence and prevalence of people suffering Alzheimer s and dementia-related disease. The cost of extended care is set to increase, as is the burden on family members to care for those suffering from Alzheimer s disease. As stated above long term care insurance products could be offered or even gene testing to determine risk. Legislative problems and changes required to assist the industry to provide effective products The insurance industry and Government will need to work collaboratively to influence financial preparedness and increase the duration of healthy longevity. Government policy and regulation that is holding back the development of insurance products include the current retirement age, the cost of pension benefits, the current rate of pension contributions and taxes, regulation of annuities and the current mandated employer contribution. Deferred lifetime annuities are almost non-existent in Australia. Regulations force life insurance companies to price these products more expensively than consumers are willing to pay (TAL, 2014). A variety and number of changes could be made to legislation including offering tax incentives for voluntary pension savings; making pensions mandatory; requiring a minimum annuitisation of pensions; improving people s awareness of their financial status at retirement; matching the retirement age for private pensions funded through superannuation (Generali Assicuranzioni, 2013). Specifically ASFA has recommended the SIS regulations be amended to facilitate product innovation in pensions and annuities (Dragan Savic, 2013). These include: provide equivalent treatment to post-retirement Winner 2014 ALUCA TurksLegal Scholarship 5

6 products offered by life insurance companies and by superannuation funds; set out general requirements for longevity products rather than mirror specific characteristics of existing products; and allow products which provide deferred benefits past normal retirement age to be offered (Dragan Savic, 2013). There are various legislative barriers to the development and use of annuity products. Policy settings need to be adjusted to increase the variety and use of these products, as they are an effective tool for managing longevity risk. Conclusion The rapid aging of Australia s population over the next 40 years and decrease in growth of the workforce is going to create problems. There will be an increased strain on the health care system, decreased proportion of workers relative to retirees and uncertain financial futures for the oldest generations. The increase in life expectancy and change in prevalence and incidence of diseases or even the possibility of new illnesses becoming apparent can mean that the future is still uncertain in relation to how the industry adapts to these demographic changes. But it does present opportunities for the insurance industry and Governments alike: innovative financial products; long term care products specific to the older population; medical and technological advancements to reduce the cost of dependency and lengthen the period of healthy and productive life, as well as reduced dependency on social safety nets. There are many ways that Australia can prepare individuals for retirement as the demographics change over the next 40 years based on the examples globally. There is no single product or offering that will meet the challenge. Winner 2014 ALUCA TurksLegal Scholarship 6

7 Works Cited Australian Bureau of Statistics (ABS), Population by age and sex, regions of Australia. Cat. No , [Online] Available at: Accessed September 16, 2014 Australian Institute of Health and Welfare (AIHW), Australian trends in life expectancy. [Online] Available at: Accessed September 16, 2014 Oeppen J, Vaupel JW, Broken limits to life expectancy. Science 2002;296: Department of Health and Ageing, National Framework for Action on Dementia. [Online] Available at: Accessed September 16, 2014 Commonwealth of Australia, Australia's Demographic Challenges; Appendix the economic implications of an ageing population. [Online] Available at: Accessed September 16, 2014 RGA Reinsurance Company, Aging Populations: How Governments and the Insurance Industry Can Work Together. Available at: Dragan Savic, Australia s aging population: what existing policy settings could be changed, or new policies implemented, to better insulate Australia from the future economic impacts of an ageing population. Available at: TAL, Retirement Income Solutions needed [Online] Available at: Generali Assicuranzioni, Ageing: Insurance and Government Italy, Germany and China. Available at: Samsung Life Insurance, How the Insurance Industry and Governments Could Work More Closely Together to Begin to Tackle Jointly the Emerging Problems Caused By an Aging Population. Available at: Alzheimer s Australia, 2014.Dementia and Memory Loss Statistics [Online] Available at: https://fightdementia.org.au/about-dementiaand-memory-loss/statistics National Institutes of Health (NIH), Brain Research through Advancing Innovative Neurotechnologies (BRAIN) Initiative. [Online] Available at: Macquarie, Macquarie Life Active [Online] Available at: EY, Global Insurance Outlook Available at: Tim Eppert, GenRe, Critical Illness: Fit for the Elderly? Risk Insights Vol 18 No. 3 Available at: National Care Planning Council, Guide to Long Term Care Planning: About Long Term Care. Available at: Winner 2014 ALUCA TurksLegal Scholarship 7

Critical Illness Fit for the Elderly?

Critical Illness Fit for the Elderly? No. 31, October 2014 Critical Illness Fit for the Elderly? by Tim Eppert + Critical illness (CI) insurance provides a financial lifeline to people facing the consequences of being diagnosed with a severe

More information

Dragan Savic. 12 August 2013

Dragan Savic. 12 August 2013 FSC Deloitte Future Leaders Award 2013 Australia s ageing population What existing policy settings could be changed, or new polices implemented, to better insulate Australia from the future economic impacts

More information

Contact us. Hoa Bui T: + 61 (02) 9335 8938 E: hbui@kpmg.com.au. Briallen Cummings T: + 61 (02) 9335 7940 E: bcummings01@kpmg.com.au. www.kpmg.com.

Contact us. Hoa Bui T: + 61 (02) 9335 8938 E: hbui@kpmg.com.au. Briallen Cummings T: + 61 (02) 9335 7940 E: bcummings01@kpmg.com.au. www.kpmg.com. Contact us Hoa Bui T: + 61 (02) 9335 8938 E: hbui@kpmg.com.au Briallen Cummings T: + 61 (02) 9335 7940 E: bcummings01@kpmg.com.au www.kpmg.com.au No reliance This report should not be regarded as suitable

More information

CPF LIFE Singapore s National Annuity Scheme

CPF LIFE Singapore s National Annuity Scheme CPF LIFE Singapore s National Annuity Scheme Don Yeo Deputy Chief Executive Officer Central Provident Fund Board, Singapore Singapore Demographics Chart 1: Life Expectancy at Birth/ at Age 55 1957 1980

More information

An update on the level and distribution of retirement savings

An update on the level and distribution of retirement savings ASFA Research and Resource Centre An update on the level and distribution of retirement savings Ross Clare Director of Research March 2014 The Association of Superannuation Funds of Australia Limited (ASFA)

More information

Post Retirement Health Insurance

Post Retirement Health Insurance Post Retirement Health Insurance KC Cheung, FSA Regional Product Actuary Swiss Re, Life & Health Session Number: MBR10 Post-Retirement Health My Challenges What is post retirement healthcare? Post retirement

More information

Australia s retirement provision: the decumulation challenge. John Piggott Director CEPAR

Australia s retirement provision: the decumulation challenge. John Piggott Director CEPAR Australia s retirement provision: the decumulation challenge John Piggott Director CEPAR Outline of talk Introduction to Australian retirement policy Issues in Longevity Current retirement products in

More information

Contents. What is an intergenerational report?

Contents. What is an intergenerational report? What is an intergenerational report? An intergenerational report assesses the long term sustainability of Commonwealth finances. It examines the impact of current policies and trends, including population

More information

Changes to regulatory settings for financial products dealing with longevity

Changes to regulatory settings for financial products dealing with longevity ASFA Research and Resource Centre Changes to regulatory settings for financial products dealing with longevity Ross Clare Director of Research October 2013 ASFA Level 6 66 Clarence Street Sydney NSW 2000

More information

Contents: What is an Annuity?

Contents: What is an Annuity? Contents: What is an Annuity? When might I need an annuity policy? Types of annuities Pension annuities Annuity income options Enhanced and Lifestyle annuities Impaired Life annuities Annuity rates FAQs

More information

Managing the financial consequences of LTC risks Christophe Courbage

Managing the financial consequences of LTC risks Christophe Courbage Managing the financial consequences of LTC risks Christophe Courbage The Geneva Association What is LTC risk? Risk of becoming dependent (functional limitation) and of needing LTC in the future LTC is

More information

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES AUSTRALIA

PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES AUSTRALIA PENSIONS AT A GLANCE 2011: RETIREMENT-INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions AUSTRALIA Australia: pension system in 2008

More information

1. INTRODUCTION 2. EXECUTIVE SUMMARY 3. SUBMISSIONS. Loretta DeSourdy Head of Regulatory Affairs Westpac New Zealand Limited PO Box 691 Wellington

1. INTRODUCTION 2. EXECUTIVE SUMMARY 3. SUBMISSIONS. Loretta DeSourdy Head of Regulatory Affairs Westpac New Zealand Limited PO Box 691 Wellington BT FUNDS MANAGEMENT (NZ) LIMITED AND WESTPAC NEW ZEALAND LIMITED Submission to the Commission for Financial Literacy and Retirement Income on the 2013 Review of Retirement Income Policy 10 June 2013 Mariëtte

More information

The Institute of Public Accountants. Review of retirement income stream regulation

The Institute of Public Accountants. Review of retirement income stream regulation The Institute of Public Accountants Review of retirement income stream regulation 5 September 2014 Introduction Benefits and Regulation Unit - Personal and Retirement Income Division The Treasury Langton

More information

HOME EQUITY RELEASE THE FOURTH PILLAR OF RETIREMENT FUNDING. Christine Brownfield

HOME EQUITY RELEASE THE FOURTH PILLAR OF RETIREMENT FUNDING. Christine Brownfield HOME EQUITY RELEASE THE FOURTH PILLAR OF RETIREMENT FUNDING Christine Brownfield 20 th November 2014 Our Retirement Income System The Age Pension Compulsory Superannuation Voluntary Superannuation + Other

More information

Age Pension & Retirement Incomes. Catherine Nance PricewaterhouseCoopers 2008

Age Pension & Retirement Incomes. Catherine Nance PricewaterhouseCoopers 2008 Age Pension & Retirement Incomes Catherine Nance PricewaterhouseCoopers 2008 Age Pension & Retirement Incomes Where do we want to be Where are we now Solutions Policy options Capital market options Australia

More information

IOPS Member country or territory pension system profile: TRINIDAD AND TOBAGO. Update as of 15 February 2013

IOPS Member country or territory pension system profile: TRINIDAD AND TOBAGO. Update as of 15 February 2013 IOPS Member country or territory pension system profile: TRINIDAD AND TOBAGO Report 1 issued on September 2011, validated by the Central Bank of Trinidad and Tobago Update as of 15 February 2013 1 This

More information

The Actuarial Society of Hong Kong Product Development Case Studies and Food for Thought

The Actuarial Society of Hong Kong Product Development Case Studies and Food for Thought The Actuarial Society of Hong Kong Product Development Case Studies and Food for Thought Andy Hui 6 November 2014 Why Product Development? Key Partners and Enablers Direct Insurance Co. Value Proposition

More information

Submission to the Tax White Paper Taskforce review of Australia s retirement income system

Submission to the Tax White Paper Taskforce review of Australia s retirement income system 24 July 2015 Submission to the Tax White Paper Taskforce review of Australia s retirement income system About the NWRN The NWRN is the peak body for community legal services which provide legal advice

More information

Do you see yourself working forever?

Do you see yourself working forever? RETIREMENT AIA RETIREMENT SAVER (II) Do you see yourself working forever? Take charge with AIA Retirement Saver (II) today, so you can face retirement with more assurance tomorrow. aia.com.sg 01 RETIREMENT

More information

Australia s Future Tax System Preliminary Submission from the Institute of Actuaries of Australia

Australia s Future Tax System Preliminary Submission from the Institute of Actuaries of Australia 21 October 2008 AFTS Secretariat The Treasury Langton Crescent PARKES ACT 2600 Email: AFTS@treasury.gov.au Dear Sir/Madam Purpose Australia s Future Tax System Preliminary Submission from the Institute

More information

Understanding Superannuation

Understanding Superannuation Understanding Superannuation Client Fact Sheet July 2012 Superannuation is an investment vehicle designed to assist Australians save for retirement. The Federal Government encourages saving through superannuation

More information

ATTACHMENT 10 STATEMENT OF REFORM PRIORITIES, CHALLENGER SUBMISSION TO TAX FORUM, OCTOBER 2011

ATTACHMENT 10 STATEMENT OF REFORM PRIORITIES, CHALLENGER SUBMISSION TO TAX FORUM, OCTOBER 2011 ATTACHMENT 10 STATEMENT OF REFORM PRIORITIES, CHALLENGER SUBMISSION TO TAX FORUM, OCTOBER 2011 Ik A tax plan for our future Stronger. Fairer.Simpler TAX FORD 4-5 October 2011 -qq STATEMENT OF REFORM PRIORITIES

More information

Australia. Qualifying conditions. Benefit calculation. Defined contribution. Key indicators: Australia. Australia: Pension system in 2014

Australia. Qualifying conditions. Benefit calculation. Defined contribution. Key indicators: Australia. Australia: Pension system in 2014 11. PENSIONS AT A GLANCE 215: COUNTRY PROFILES AUSTRALIA Australia Australia: Pension system in 214 Australia s retirement income system has three components: a means-tested Age Pension funded through

More information

Australia: Retirement Income and Annuities Markets. Contractual Savings Conference April 2008 Greg Brunner

Australia: Retirement Income and Annuities Markets. Contractual Savings Conference April 2008 Greg Brunner Australia: Retirement Income and Annuities Markets Contractual Savings Conference April 2008 Greg Brunner Pension system Age pension in place since 1908, funded on a payas-you go basis Means testing. The

More information

Chapter 10 SUPPLEMENTARY FINANCING OPTION (3) MEDICAL SAVINGS ACCOUNTS. Medical Savings Accounts as Supplementary Financing

Chapter 10 SUPPLEMENTARY FINANCING OPTION (3) MEDICAL SAVINGS ACCOUNTS. Medical Savings Accounts as Supplementary Financing Chapter 10 SUPPLEMENTARY FINANCING OPTION (3) MEDICAL SAVINGS ACCOUNTS Medical Savings Accounts as Supplementary Financing 10.1 Medical savings accounts are mandatory employment based and income linked

More information

Risk management for long-term guaranteed annuity products. Investment risk. Keywords: longevity risk, ageing, retirement, annuity, regulation.

Risk management for long-term guaranteed annuity products. Investment risk. Keywords: longevity risk, ageing, retirement, annuity, regulation. Keywords: longevity risk, ageing, retirement, annuity, regulation. THE DEVELOPMENT OF A LIFE ANNUITY MARKET IN AUSTRALIA: AN ANALYSIS OF SUPPLIER RISKS AND THEIR MITIGATION The significant accumulation

More information

Mandatory Public Annuity: Singapore s Experience

Mandatory Public Annuity: Singapore s Experience Mandatory Public Annuity: Singapore s Experience Don Yeo Deputy Chief Executive Officer (Policy and Corporate Development) Central Provident Fund Board Singapore The Central Provident Fund CPF: Fully funded,

More information

TREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES

TREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES TREASURY FACT SHEET: HELPING AMERICAN FAMILIES ACHIEVE RETIREMENT SECURITY BY EXPANDING LIFETIME INCOME CHOICES In September 2009, President Obama announced several new steps to make it easier for American

More information

Recent Trends in Superannuation Fund Assets

Recent Trends in Superannuation Fund Assets Recent Trends in Superannuation Fund Assets The assets of superannuation funds have increased rapidly in the 99s. Along with managed funds more generally, this growth has been considerably faster than

More information

Enhanced Annuities in Asia

Enhanced Annuities in Asia Enhanced Annuities in Asia A Case Study Cord-Roland Rinke, Life & Health Longevity Beijing, 6th - 7th September 2013 Disclaimer The information provided in this presentation does in no way whatsoever constitute

More information

The cost of physical inactivity

The cost of physical inactivity The cost of physical inactivity October 2008 The cost of physical inactivity to the Australian economy is estimated to be $13.8 billion. It is estimated that 16,178 Australians die prematurely each year

More information

Annuities in Denmark: Risk-Sharing in Accumulation and Payout Phases

Annuities in Denmark: Risk-Sharing in Accumulation and Payout Phases Annuities in Denmark: Risk-Sharing in Accumulation and Payout Phases Peter Skjødt Executive Director, Msc Econ. Agenda The Danish pension system background information Risk Sharing active workers and pensioners,

More information

The Benefits of Simplified Superannuation Reform

The Benefits of Simplified Superannuation Reform The Benefits of Simplified Superannuation Reform Prafula Fernandez School of Business Law Curtin University of Technology Abstract This paper considers the recent Superannuation tax reforms in the Tax

More information

Decumulation phase some information and preliminary analysis for the work of OPSG DC sub-group. Matti Leppälä OPSG 19.5.2014

Decumulation phase some information and preliminary analysis for the work of OPSG DC sub-group. Matti Leppälä OPSG 19.5.2014 Decumulation phase some information and preliminary analysis for the work of OPSG DC sub-group Matti Leppälä OPSG 19.5.2014 Definitions Decumulation or payout phase is the period during which assets accrued

More information

Retirement made easy. Helping you achieve your retirement goals. rest.com.au/restpension 1300 305 778

Retirement made easy. Helping you achieve your retirement goals. rest.com.au/restpension 1300 305 778 Retirement made easy Helping you achieve your retirement goals rest.com.au/restpension 1300 305 778 Helping you achieve your retirement goals As you near retirement you probably have a number of questions

More information

The individual. A Resource for Your Retirement

The individual. A Resource for Your Retirement Retirement today requires more planning than for previous generations. Americans are living longer many will live 20 to 30 years or more in retirement. Finding a way to make savings last over such a long

More information

MEETING THE FINANCIAL NEEDS OF RETIREES: a layering approach to building retirement income portfolios

MEETING THE FINANCIAL NEEDS OF RETIREES: a layering approach to building retirement income portfolios MEETING THE FINANCIAL NEEDS OF RETIREES: a layering approach to building retirement income portfolios JEREMY COOPER, SF Fin, Chairman Retirement Income Challenger AARON MINNEY, F Fin, CFA, Head of Retirement

More information

PENSIONS AT A GLANCE 2009: RETIREMENT INCOME SYSTEMS IN OECD COUNTRIES UNITED STATES

PENSIONS AT A GLANCE 2009: RETIREMENT INCOME SYSTEMS IN OECD COUNTRIES UNITED STATES PENSIONS AT A GLANCE 29: RETIREMENT INCOME SYSTEMS IN OECD COUNTRIES Online Country Profiles, including personal income tax and social security contributions UNITED STATES United States: pension system

More information

The value of life insurance

The value of life insurance The value of life insurance Important information CommInsure Protection is an insurance product which is offered through the Colonial Super Retirement Fund ABN 40 328 908 469 (the Fund). Colonial Mutual

More information

SUBMISSION TO INQUIRY INTO AFFORDABLE HOUSING. Prepared by National Policy Office

SUBMISSION TO INQUIRY INTO AFFORDABLE HOUSING. Prepared by National Policy Office SUBMISSION TO INQUIRY INTO AFFORDABLE HOUSING Prepared by National Policy Office March 2014 COTA Australia Authorised by: Ian Yates AM Chief Executive iyates@cota.org.au 0418 835 439 Prepared by: Jo Root

More information

The value of life insurance

The value of life insurance The value of life insurance Most of us think it won t happen to me And if you are very lucky, it might not. But, chances are, many of us will have our lives interrupted by an accident, illness or death.

More information

PENSIONS POLICY INSTITUTE. Comparison of pension outcomes under EET and TEE tax treatment

PENSIONS POLICY INSTITUTE. Comparison of pension outcomes under EET and TEE tax treatment Comparison of pension outcomes under EET and TEE tax treatment Comparison of pension outcomes under EET and TEE tax treatment Executive Summary 1 Introduction 4 1. Impact of tax treatment on a single

More information

THE CHALLENGES OF FUNDING HEALTHCARE FOR AN AGEING POPULATION A COMPARISON OF ACTUARIAL METHODS AND BENEFIT DESIGNS

THE CHALLENGES OF FUNDING HEALTHCARE FOR AN AGEING POPULATION A COMPARISON OF ACTUARIAL METHODS AND BENEFIT DESIGNS THE CHALLENGES OF FUNDING HEALTHCARE FOR AN AGEING POPULATION A COMPARISON OF ACTUARIAL METHODS AND BENEFIT DESIGNS 19 th November 2013 Stephen Bishop Challenges of Old Age Healthcare Provisions 1. Clinical

More information

Is widowhood out of date in the 21st Century?

Is widowhood out of date in the 21st Century? The Year 2000 International Research Conference on Social Security Helsinki, 25-27 September 2000 Social security in the global village Is widowhood out of date in the 21st Century? Linda ROSENMAN The

More information

Review into the Governance, Efficiency, Structure and Operation of Australia's Superannuation System

Review into the Governance, Efficiency, Structure and Operation of Australia's Superannuation System Review into the Governance, Efficiency, Structure and Operation of Australia's Superannuation System ACTU submission on Structure 26 February 2010 D No 01/2010 Introduction The review panel s papers on

More information

Aligning action with aims: Optimising the benefits of workplace wellness

Aligning action with aims: Optimising the benefits of workplace wellness Aligning action with aims: Optimising the benefits of workplace wellness Dr Michael McCoy Medibank Health Solutions Strategy & Corporate Development Health & Wellbeing September 2011 Aligning action with

More information

The Four Pillars and Public Policy Prudential s positions on legislative and regulatory issues impacting retirement security in America

The Four Pillars and Public Policy Prudential s positions on legislative and regulatory issues impacting retirement security in America Prudential Financial The Four Pillars and Public Policy Prudential s positions on legislative and regulatory issues impacting retirement security in America Public policy affects many aspects of our everyday

More information

Subject CA1 Paper 2 April 2010 Question 6

Subject CA1 Paper 2 April 2010 Question 6 ActEd Acronym App Question 1 Page 1 Subject CA1 Paper 2 April 2010 Question 6 Question An insurance company has been selling term assurance and annuities for over 25 years. Discuss the features of the

More information

Pension reforms in the UK: what can be learned from other countries?

Pension reforms in the UK: what can be learned from other countries? Agenda Advancing economics in business Pension reforms in the UK: what can be learned from other countries? Reforms in the UK pensions market announced by the Chancellor of the Exchequer, George Osborne,

More information

Introduction. Social Security Framework. Governance Structure of CPF Board

Introduction. Social Security Framework. Governance Structure of CPF Board Introduction Introduction Social Security Framework Singapore s social security framework is founded on the principles of self-provision and self-reliance. The responsibility to provide for one s own retirement

More information

Media Release. - more - AIA Hong Kong. AIA Financial Centre, 712 Prince Edward Road East, Kowloon, Hong Kong T: (852) 2881 3333 AIA.COM.

Media Release. - more - AIA Hong Kong. AIA Financial Centre, 712 Prince Edward Road East, Kowloon, Hong Kong T: (852) 2881 3333 AIA.COM. AIA Hong Kong AIA Financial Centre, 712 Prince Edward Road East, Kowloon, Hong Kong T: (852) 2881 3333 AIA.COM.HK Media Release AIA Hong Kong Launches Brand New Critical Illness Protection Plan Smart Care

More information

Longevity Risk Management and the Development of a Life Annuity Market in Australia

Longevity Risk Management and the Development of a Life Annuity Market in Australia www.business.unsw.edu.au The University of New South Wales Australian School of Business Australian School of Business Research Paper No. 2010ACTL01 Longevity Risk Management and the Development of a Life

More information

BANK OF PAPUA NEW GUINEA SUBMISSION TO THE TAX REVIEW COMMITTEE ON TAXATION IN SUPERANNUATION AND LIFE INSURANCE

BANK OF PAPUA NEW GUINEA SUBMISSION TO THE TAX REVIEW COMMITTEE ON TAXATION IN SUPERANNUATION AND LIFE INSURANCE BANK OF PAPUA NEW GUINEA SUBMISSION TO THE TAX REVIEW COMMITTEE ON TAXATION IN 9 MAY 2014 1) INTRODUCTION This paper aims to bring to the attention of the Taxation Review Committee (TRC) issues relating

More information

Mental illness what next for disability insurance?

Mental illness what next for disability insurance? Mental illness what next for disability insurance? Cath Watson and Dale Jackson Actuaries Institute This presentation has been prepared for the Actuaries Institute 2015 Actuaries Summit. The Institute

More information

Review of retirement income stream regulation

Review of retirement income stream regulation Review of retirement income stream regulation Submission by UniSuper About UniSuper UniSuper is the superannuation fund dedicated to people working in Australia's higher education and research sectors.

More information

Retirement Income White Paper Insights Presentation

Retirement Income White Paper Insights Presentation Retirement Income White Paper Insights Presentation Alun Stevens Jack Ding Nathan Bonarius Agenda Background Preliminary projections What are the risks? What are the possible solutions? Purpose of presentation

More information

Tax discussion paper submission. May 2015 The Association of Superannuation Funds of Australia (ASFA)

Tax discussion paper submission. May 2015 The Association of Superannuation Funds of Australia (ASFA) Tax discussion paper submission May 2015 The Association of Superannuation Funds of Australia (ASFA) Contents Executive summary 3 Key findings 6 Recommendations 7 Objectives of superannuation 8 - Primary

More information

The Cypriot Pension System: Adequacy and Sustainability

The Cypriot Pension System: Adequacy and Sustainability Cyprus Economic Policy Review, Vol. 6, No. 2, pp. 49-58 (2012) 1450-4561 49 The Cypriot Pension System: Adequacy and Sustainability Philippos Mannaris Aon Hewitt Abstract The fundamental objective of pension

More information

Assurance Dépendance

Assurance Dépendance Assurance Dépendance Long-Term Care Insurance 1 Introduction 2 Caractéristiques des produits 3 The CIRDAD 4 Technical Issues 5 Underwriting selection and claims management 2 What is LTC (Loss of Autonomy)?

More information

National Disability Long term Care and Support Scheme

National Disability Long term Care and Support Scheme National Disability Long term Care and Support Scheme Submission to the Productivity Commission Richard Madden, BSc, PhD, FIAA Professor of Health Statistics, University of Sydney August 2010 Outline This

More information

REVIEW OF RETIREMENT INCOME STREAM REGULATION

REVIEW OF RETIREMENT INCOME STREAM REGULATION 10 September 2014 General Manager Personal and Retirement Income Division The Treasury Langton Crescent PARKES ACT 2600 Email: paul.tilley@treasury.gov.au Dear Mr Tilley, REVIEW OF RETIREMENT INCOME STREAM

More information

Old Age Income Protection in Australia

Old Age Income Protection in Australia Old Age Income Protection in Australia Hazel Bateman CPS Discussion Paper 06/2007 Old Age Income Protection in Australia* Dr Hazel Bateman School of Economics Centre for Pensions and Superannuation University

More information

INVESTMENT SOLUTIONS. 3 Market update 4 EDITION 01 AUTUMN 2014 INSIDE: Choosing aged care: what you need to know

INVESTMENT SOLUTIONS. 3 Market update 4 EDITION 01 AUTUMN 2014 INSIDE: Choosing aged care: what you need to know INVESTMENT SOLUTIONS EDITION 01 AUTUMN 2014 INSIDE: 3 Market update 4 End of financial year planning starts now 6 Choosing aged care: what you need to know 7 Covering all bases with income protection Welcome

More information

bulletin 126 Healthy life expectancy in Australia: patterns and trends 1998 to 2012 Summary Bulletin 126 NOVEMBER 2014

bulletin 126 Healthy life expectancy in Australia: patterns and trends 1998 to 2012 Summary Bulletin 126 NOVEMBER 2014 Bulletin 126 NOVEMBER 2014 Healthy life expectancy in Australia: patterns and trends 1998 to 2012 Summary bulletin 126 Life expectancy measures how many years on average a person can expect to live, if

More information

The path to retirement success

The path to retirement success The path to retirement success How important are your investment and spending strategies? In this VIEW, Towers Watson Australia managing director ANDREW BOAL reports on investing for retirement success

More information

Challenger Retirement Income Research. How much super does a retiree really need to live comfortably? A comfortable standard of living

Challenger Retirement Income Research. How much super does a retiree really need to live comfortably? A comfortable standard of living 14 February 2012 Only for use by financial advisers How much super does a retiree really need to live comfortably? Understanding how much money will be needed is critical in planning for retirement One

More information

For many Australians, their main form of savings over their lifetime is their home. Directing savings towards a home provides two benefits:-

For many Australians, their main form of savings over their lifetime is their home. Directing savings towards a home provides two benefits:- 1. Executive Summary For many Australians, their main form of savings over their lifetime is their home. Directing savings towards a home provides two benefits:- Ø A place to live, with security of tenure.

More information

Can Equity Release Mechanisms fund long term care costs? Desmond Le Grys

Can Equity Release Mechanisms fund long term care costs? Desmond Le Grys 2001 Health Care Conference Can Equity Release Mechanisms fund long term care costs? Desmond Le Grys 1 Introduction 1.1 Scope This paper attempts to explain why equity release products have rarely been

More information

Delivering for Seniors

Delivering for Seniors 1 Delivering for Seniors DELIVERING FOR SENIORS Federal Labor s Delivering for Seniors package will support and encourage older Australians in the workforce, tackle age discrimination, support grandparent

More information

COMMINSURE LIFETIME INCOME ANNUITY.

COMMINSURE LIFETIME INCOME ANNUITY. COMMINSURE LIFETIME INCOME ANNUITY. A retirement income solution now with a Death Benefit Guarantee. A CommInsure Lifetime Income Annuity now offers even more comfort, protection and value with a Death

More information

A U.S. Perspective on Annuity Lifetime Income Guarantees

A U.S. Perspective on Annuity Lifetime Income Guarantees A U.S. Perspective on Annuity Lifetime Income Guarantees Jacob M. Herschler June 8, 2011 Mexico City Agenda Defined Benefit and Defined Contribution plan trends in the U.S. and prospects for longevity

More information

Retirement Saving in Australia

Retirement Saving in Australia Garry Barrett UNSW Yi-Ping Tseng University of Melbourne November 2006 Overview Outline of Presentation 1 Introduction 2 Social Security in Australia 3 Voluntary private retirement saving 4 Mandated private

More information

2 Voluntary retirement module specification

2 Voluntary retirement module specification 2 Voluntary retirement module specification As part of its research on Superannuation Policy for Post-Retirement the Commission has developed a model referred to as the Productivity Commission Retirement

More information

#ReachingMyGoals #StartsToday

#ReachingMyGoals #StartsToday About this report The purpose of this report is to provide you a framework for assessing your financial health and, where relevant, trigger further action on your part. We also include insights and practical

More information

Demographics issues and Pension systems. Najat El Mekkaoui de Freitas najat.el-mekkaoui@dauphine.fr. Université Paris Dauphine.

Demographics issues and Pension systems. Najat El Mekkaoui de Freitas najat.el-mekkaoui@dauphine.fr. Université Paris Dauphine. Demographics issues and Pension systems Najat El Mekkaoui de Freitas najat.el-mekkaoui@dauphine.fr Université Paris Dauphine May, 2009 The demographic and economic challenges Over the next decades many

More information

3. The first stage public consultation conducted from March to June 2008 aimed at consulting the public on

3. The first stage public consultation conducted from March to June 2008 aimed at consulting the public on EXECUTIVE SUMMARY The Government published the Healthcare Reform Consultation Document Your Health, Your Life (the Consultation Document ) on 13 March 2008 to initiate the public consultation on healthcare

More information

Retirement Payouts and Risks Involved

Retirement Payouts and Risks Involved Retirement Payouts and Risks Involved IOPS OECD Global Forum, Beijing, 14-15 November 2007 Financial Affairs Division, OECD 1 Structure Different types of payout options Lump-sum (pros and cons) Programmed

More information

March Newsletter 2013

March Newsletter 2013 March Newsletter 2013 Contents Easter Planning Looking to Upgrade your Equipment or Motor Vehicles? Tax Payer Hit: 93% Tax on Excess Super Contributions Welcome to our Easter Newsletter Baby Bonus Set

More information

MEETING THE RETIREMENT INCOME CHALLENGE APRIL 2013

MEETING THE RETIREMENT INCOME CHALLENGE APRIL 2013 MEETING THE RETIREMENT INCOME CHALLENGE APRIL 2013 INTRODUCTION The Australian retirement system is generally regarded globally as being well advanced, ranking third in the 2012 Mercer Melbourne Global

More information

Individual Income Protection. When you protect your income, you protect what matters most.

Individual Income Protection. When you protect your income, you protect what matters most. Individual Income Protection When you protect your income, you protect what matters most. What s your most valuable asset? You may think that your home, car, or investment account is the most valuable

More information

THE SOCIETY OF ACTUARIES IN IRELAND

THE SOCIETY OF ACTUARIES IN IRELAND THE SOCIETY OF ACTUARIES IN IRELAND ACTUARIAL STANDARD OF PRACTICE PRSA-5 PERSONAL RETIREMENT SAVINGS ACCOUNTS AND TRANSFERS FROM OCCUPATIONAL SCHEMES Classification Mandatory MEMBERS ARE REMINDED THAT

More information

NEW ZEALAND S RETIREMENT INCOMES CHALLENGE MARCH 2012

NEW ZEALAND S RETIREMENT INCOMES CHALLENGE MARCH 2012 SECURING SECURINGRETIREMENT RETIREMENTINCOMES INCOMES NEW ZEALAND S RETIREMENT INCOMES CHALLENGE MARCH 2012 CONTENTS 1 New Zealand s Retirement Incomes Challenge 2 Could NZ be the next Greece? Learning

More information

7 Reasons Why Property

7 Reasons Why Property 7 Reasons Why Property Investment can t be ignored. Know your options before it s too late. What is in this report? This report is a must read for anyone looking to improve their lifestyle and enjoy greater

More information

The Individual Annuity

The Individual Annuity The Individual Annuity a re s o u rc e i n yo u r r e t i r e m e n t an age of Decision Retirement today requires more planning than for previous generations. Americans are living longer many will live

More information

How much insurance cover?

How much insurance cover? How much insurance cover? We consider life and TPD insurance coverage to be family protection it is about protecting your family. Life Insurance The purpose of life insurance is to provide your dependants

More information

Accelerated Protection. Do I need Critical Illness insurance?

Accelerated Protection. Do I need Critical Illness insurance? Accelerated Protection Do I need Critical Illness insurance? Are you prepared? It s a fact of life that we all get sick, and sometimes seriously. The cost of recovery from an illness like cancer or heart

More information

Contributing the Family Home to Super

Contributing the Family Home to Super Contributing the Family Home to Super An innovative proposal designed to assist with the accommodation and income needs of older Australians wishing to remain in their own homes. Abstract There has been

More information

An ageing workforce and workers compensation what are the implications, in particular with an increasing national retirement age?

An ageing workforce and workers compensation what are the implications, in particular with an increasing national retirement age? An ageing workforce and workers compensation what are the implications, in particular with an increasing national retirement age? Prepared by Andrew McInerney Presented to the Institute of Actuaries of

More information

Options and Challenges for the Payout Phase

Options and Challenges for the Payout Phase Options and Challenges for the Payout Phase 4 th Contractual Saving Conference Washington DC, April 2-4, 2008 Pablo Antolin DAF/FIN OECD, Private Pension Unit OECD project: Payout Phase and Annuities Policy

More information

Recent Trends in the Australian Disability Income Protection Insurance Market

Recent Trends in the Australian Disability Income Protection Insurance Market White Paper Recent Trends in the Australian Disability Income Protection Insurance Market Are There Lessons for Other Markets? FINEOS Copyright 2014 www.fineos.com Over the last two years the quarterly

More information

An explanation of social assistance, pension schemes, insurance schemes and similar concepts

An explanation of social assistance, pension schemes, insurance schemes and similar concepts From: OECD Framework for Statistics on the Distribution of Household Income, Consumption and Wealth Access the complete publication at: http://dx.doi.org/10.1787/9789264194830-en An explanation of social

More information

The Truth About INSURANCE

The Truth About INSURANCE INSURANCE The Truth About Annuities are one of the least known, least understood and most underutilized financial instruments. Yet as Paul Goldstein explains, in certain circumstances annuities should

More information

When it s hard to get the help you need, we ll make it easy.

When it s hard to get the help you need, we ll make it easy. PROTECTION AIA PRIME CRITICAL COVER When it s hard to get the help you need, we ll make it easy. AIA Prime Critical Cover gives you easy access to critical illness protection with coverage up to age 100.

More information

Submission to the Financial System Inquiry. August 2014. Homesafe Solutions Pty Ltd

Submission to the Financial System Inquiry. August 2014. Homesafe Solutions Pty Ltd Submission to the Financial System Inquiry August 2014 Homesafe Solutions Pty Ltd Executive Summary Homesafe Solutions Pty Ltd welcomes the inclusion of access to equity in the home in the Interim Report

More information

Maintain your lifestyle even when the unexpected happens

Maintain your lifestyle even when the unexpected happens AIA SECURE CRITICAL COVER PROTECTION Maintain your lifestyle even when the unexpected happens Lessen your financial burden with affordable Critical Illness coverage. aia.com.sg Cancer is the No.1 killer

More information

Expanding the coverage of private disability insurance to reduce the economic burden of social disability insurance. The Financial Services Council

Expanding the coverage of private disability insurance to reduce the economic burden of social disability insurance. The Financial Services Council Expanding the coverage of private disability insurance to reduce the economic burden of social disability insurance The Financial Services Council March 2014 Contents Glossary... i Executive summary...

More information

Superannuation and Life Assurance Scheme. Members booklet 2008

Superannuation and Life Assurance Scheme. Members booklet 2008 Superannuation and Life Assurance Scheme Members booklet 2008 Contents Member Booklet 2008 Contents Introduction 3 Definitions 4-5 Leaving pensionable service If you are a qualifying member 12 If you are

More information

AustChoice Super general reference guide (ACH.02)

AustChoice Super general reference guide (ACH.02) AustChoice Super general reference guide (ACH.02) Issued: 28 May 2015 This guide contains important information not included in the AustChoice Super PDS. We recommend you read this entire guide. The information

More information