position to access it. Measurement of voluntary contributions provides more insight into members’ engagement and long term savings. This also reflects the decision making of members who make additional contributions, but cannot qualify for Indicator AIST response AIST key points Are member preferences and needs being met by the system providing products and information to help members optimally consume their retirement incomes? Introduction of new Concerned with ambiguity of this indicator. retirement income While we anticipate innovation in retirement income products and products, it is not sufficient to say that introduction of new development of products equates with member preferences being met. more tailored Evidence in accumulation funds suggest that product default products* development has been supply driven rather than demand (output) driven. Proposed new Products that genuinely help members consume their indicator: Extent of retirement incomes optimally will often, but not always, risk pooling to assist include elements of risk pooling. The extent to which risks optimal are pooled within the system is suggested above as an consumption of additional Economies of Scale indicator and should also be retirement incomes included here. Larger funds often manage risk-pooling directly in-house, while other funds can avail themselves of external arrangements. The extent to which members have the opportunity to share risks collectively is an important efficiency indicator and also an indicator of optimality of de-accumulation of retirement savings. Take up of different Concerned with ambiguity of this indicator. retirement income While we anticipate innovation in retirement income products (output)
position to access it. Measurement of voluntary contributions provides more insight into members’ engagement and long term savings. This also reflects the decision making of members who make additional contributions, but cannot qualify for Indicator AIST response AIST key points Are member preferences and needs being met by the system providing products and information to help members optimally consume their retirement incomes? Introduction of new retirement income products and development of more tailored default products* (output) Concerned with ambiguity of this indicator. While we anticipate innovation in retirement income products, it is not sufficient to say that introduction of new products equates with member preferences being met. Evidence in accumulation funds suggest that product development has been supply driven rather than demand driven. Proposed new indicator: Extent of risk pooling to assist optimal consumption of retirement incomes Products that genuinely help members consume their retirement incomes optimally will often, but not always, include elements of risk pooling. The extent to which risks are pooled within the system is suggested above as an additional Economies of Scale indicator and should also be included here. Larger funds often manage risk-pooling directly in-house, while other funds can avail themselves of external arrangements. The extent to which members have the opportunity to share risks collectively is an important efficiency indicator and also an indicator of optimality of de-accumulation of retirement savings. Take up of different retirement income products (output) Concerned with ambiguity of this indicator. While we anticipate innovation in retirement income
subdr102-superannuation-competitiveness-efficiency.docx