Cost of Saving for Retirement A perspective

Purpose of paper Stimulate debate Highlight global comparisons Compare different saving vehicles Excellent starting point Commend efforts of Rob Rusconi

IRF Perspective Support efforts to streamline costs The value of complexity is often questionable Debate must be handled responsibly Retirement provision to be encouraged – take care not to scare the consumer Many findings are intuitive

Key Fundings Size matters/economies of scale Individual arrangement more costly than bulk DB funds more onerous than D C

Be Aware Of Costs Of: Regulation Taxation Transfer of risks to members / state Longevity risks overlooked (ultimate burden on the state)

Attention Needed: Simple low cost/low frill alternatives Preservation fund complexities Home Loan issues Lump sum v.s annuity on retirement

Impact Of Costs Simple numeric example Only considers a lump sum Ignores monthly contributions Intention is to be a simple model

Conclusion IRF appreciates opportunity given by Parliament Well done to Rob on stimulating such a debate Media for allowing coverage