Retirement Portfolio Resilience Perspective
Category: Government Policy & Industry Research
This article examines the Australian Government's Retirement Income Review Consultation Paper and considers its implications for retirement portfolio construction and the future development of retirement income solutions.
The article discusses key themes emerging from the Review, including the importance of improving retirement outcomes through better risk management, clearer disclosure and more effective portfolio construction. Viewed through today's Retirement Portfolio Resilience Framework, it reflects Gyrostat's long-standing commitment to contributing to the broader evolution of Australia's retirement system by promoting approaches that help investors remain financially and emotionally invested throughout their retirement journey, regardless of the path markets take.
This article forms part of Gyrostat's broader body of government policy engagement, industry research and educational resources that contributed to the development of the Retirement Portfolio Resilience Framework.
The Retirement Income Review commissioned by the Government issued a consultation paper on 22 November 2019, and called for submissions by 3 February 2020. This article provides an overview of that consultation paper and makes some observations on the positive developments that are possible from the ‘fact base’ being established by the Review consultation paper.
Gyrostat believes that the Panel’s work has the potential to further improve the development of retirement income products, a critical element of the second and third pillars. Three key outcomes would be to:
- Further develop the risk adjusted returns disclosure arrangements criteria to assist retirees in understanding the risks inherent in retirement income products.
- Encourage the development and commercialisation of a variety of risk management approaches with the objective of improving risk adjusted returns for retirees. (Comprehensive Income Product in Retirement “CIPR” providers may form relationships with external providers as a component of the overall retirement solution.)
Develop guidelines for ‘alternative – conservative’ and ‘alternative – growth’ asset classifications, based upon the risk level rating and in particular the products ability to address sequencing risk.
