Annuities to help retirement funding

Facilitating the development of annuities could help deal with Australia's retirement funding challenges and should be a Budget priority, according to the Actuaries Institute.

In its pre-budget submission to the Federal Government, the institute has called on a number of tax and regulatory reforms to give greater access to annuities, which the institute chief executive Melinda Howes believes would help baby boomers to better prepare for retirement.

Howes said annuities was a type of investment which addresses two key risks retirees currently face: longevity and market volatility.

"Australians tend to take their superannuation balances as a lump sum on retirement - which puts pressure on the age pension because it makes it harder to manage retirement savings versus spending," Howes said.

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"But new generation annuities can address key needs in retirement, enabling retirees to better manage their retirement savings and protect against longevity and market risks," she added.

The institute had also called for the introduction of a temporary national insurance pool for high flood-risk properties.

According to the submission, the institute believes greater government involvement in the flood insurance market was necessary due to high risk properties "becoming uninsurable".