The retirement puzzle

The Australian government requires superannuation funds to develop and offer a retirement income strategy called Comprehensive Income Product for Retirement (CIPR) to help retirees meet their basic expenses with ease (Australian Government, The Treasury, 2018) by 2022. In response to this announcement, the superannuation and investment funds in Australia are proposing different strategies for their clients. In September 2019, the government of Australia commissioned a review of the retirement income system as recommended by the productivity commission. The review aims to assess the three pillars of the Australian retirement income system – their role in supporting retirement spending, the distributional impact and the fiscal burden imposed by the existing system.

The current retirement system and the variations in opinions regarding its sustainability and efficacy are puzzling for practitioners and researchers in this industry, let alone for the retirees, most of whom do not have adequate financial literacy.

Research questions

  • How likely is the average retiree to sustain a comfortable retired life, given the current market conditions?
  • What are the distributional implications of the means-tested age pension on retirees?