Defaults, decumulation and democracy

Former UK pensions minister Guy Opperman says a “decumulation disaster” is looming for Australian superannuation fund members, but it could be averted through the use of hard defaults into retirement income options.

In the first episode of the new Retirement Magazine Pension Policy Series podcast, produced in partnership with Generation Life, Opperman warns that Australia has millions of people “coming over the hill” into retirement with no plan to manage it. The Retirement Income Covenant alone is not enough – he says a strategy without implementation is meaningless, and that there is “a problem on advice and guidance”.

In conversation with Conexus Financial editor-in-chief Aleks Vickovich, and The Conexus Institute’s Jeremy Cooper and David Bell, Opperman says the superannuation system excels at accumulation but it fails members at the point where they need most help.

Opperman, who served as Parliamentary Under-Secretary of State for Pensions between 2017 and 2022 in the May and Johnson Conservative governments, argues hard defaults could work for members like a defined-benefit pension.

They also discuss the UK Labour government’s proposed pension reforms and the perennial ‘climate wars’ in Canberra.