Lifetime Income

Whole of retirement for whole of life

We bring a unique perspective to addressing the complex Retirement challenge and apply our broad skills sets and experience to support businesses wanting to address aspects of this multi-faceted challenge with a focus on assisting retirees achieve financial security and dignity throughout their retirement.

Please read on to learn more about our perspective and capabilities.

Our unique perspective

ü A new challenge. Managing retirement with dignity and safety is a new and growing challenge for all societies, including Australia. It has never arisen in the past and we are entering the new and complex arena of effectively managing the decumulation of retirement assets (superannuation, other personal and public) for retirees over a long period.

Unlike in the past, the retiree population is ageing and growing, living longer (perhaps 30 years after retirement), and has increasing expectations in retirement.

ü Funds are a means to an end, not an end. Regular income is part of a whole of retirement approach. It is a means to an end, with the end being quality of life throughout retirement.

Our focus is on retiree’s quality of life and so the use of funding to live and receive support and services efficiently and effectively is critical. This is a broader and more holistic perspective than only focussing on the provision of regular income streams

ü Current decumulation approaches are inherently inefficient. The typical approaches to funding retirement are inefficient. Such inefficiency is inherent in a system that focuses on the individual and their individual drawdowns on their assets in retirement. The challenges of establishing better ways to provide retirees with funding and support for the whole of their lives are significant, still emerging, and require a broader perspective than that supported by current paradigms.

ü Implicit and invalid underlying assumptions. Current discussions typically have the implicit assumptions that retirees are heathy, knowledgeable and confident (so capable of making good retirement decisions) and are interested in managing their retirement on an ongoing basis. While this utopia is clearly desirable, the hard reality that this is not the case in many instances needs to be acknowledged. In our view this recognition implies that effective solutions need to recognise widespread and entrenched limitations, such as the impact of cognitive decline and protection against elder abuse.

Approaches that rely on these implicit assumptions and ‘hide’ behind a mantra of seeking ‘best’ outcomes (even when these are limited to ‘financial’, but then vary by individual, can be presented as complex, and then rely on retirees making choices they may not be well placed to make) can be difficult to implement. Paradoxically, this can lead to simplistic proposals, risk avoiding the essence of fiduciary duties, and do not fully address the social mandate of superannuation or, more broadly, retiree dignity in retirement. Whole of retirement solutions require a broader perspective and be multifaceted, address the information asymmetry that is common between service providers and retirees, able to evolve as retiree needs evolve, support managing issues such as physical and cognitive decline, and provide services to enable retirees to stay in their homes.

ü Pooling of financial resources is required. Efficient use of funds through some form of pooling individual retiree’s resources together can increase fund flows very significantly and address longevity risk. It is a necessary aspect of increasing the overall efficiency of the retirement and superannuation decumulation systems. This provides basis for an integrated approach to retirement that takes advantage of improved services and synergies that emerge from taking a holistic perspective.

ü Increasing size of decumulation pool to manage. An increasing volume of funds is being sourced from superannuation savings during work, but this system remains many years from maturity. Despite this, very large amounts of money are now entering the superannuation decumulation phase and products to effectively manage this are not widely available. Further, the integration of other important sources of support, services, and income which should integrated into realistic retirement planning, is in its infancy.

ü Long-term business success. Success in supporting and developing the rapidly growing retiree market with efficient life-long financial support, services, and optimising retiree’s quality of life is a laudable objective.

Achieving this objective requires an integrated approach recognising the many facets of retirement and extracting synergies that benefit retirees. That is, ‘the whole is greater than the sum of the parts‘ and focusing on individual facets may lead to less than optimal outcomes. These are a wide open, new, and unexplored markets awaiting innovative and effective solutions that benefit all parties.

Our capabilities

ü Breadth and balance: We understand the broader complexities of retirement and the need for preparation and planning for later life and its challenges. While funding supports this, the need for an integrated and holistic approach that goes beyond financial matters remains.

ü Expertise: We provide expertise and actuarial skills on multiple levels: technical knowledge, its application in context, process governance to assure outcomes, and transferring expertise and insight.

ü Practicality: We identify root causes and drivers of issues, develop practical solutions, and have the experience to effectively implement those solutions

ü Independence: We provide professional, independent, and unbiased advice.

ü Communication: We know the importance of clearly communicating key issues and consequences to decision makers. Understanding the story the numbers tell improves decision making, supports good governance and makes implementation more effective.