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Research unit backs annuities to address longevity risk

Australians should be able to buy annuities more easily, according to the Centre of Excellence in Population Ageing Research.

In its submission to the financial system inquiry, the University of NSW unit says a high proportion of super is taken as lump sums, but in an ageing society people should be able buy products that give them a retirement income.

It wants the inquiry to consider whether distribution and advice for retirement income products limits competition, “whether advisers are knowledgeable about long-term and longevity risks” and how incentives work against certain products being recommended.

Meanwhile, the Association of Super Funds of Australia says removing impediments to the development of income stream products would help address the impact of longevity and enable more product innovation.

It calls for equivalent treatment of post-retirement products from life insurers and super funds and suggests measures to make the products more attractive to retirees and providers.

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