He explores this in A White Paper, saying New Zealand obviously requires such products to be designed, built and available in order to provide choice in retirement, especially with the popularity of KiwiSaver which provides scheme members with a lump sum at the age of retirement.

ING head of KiwiSaver distribution David Boyle says the advice industry should be having big discussions about this issue as it will be stretched to deal with demand.

He says ING has around 13,000 customers that could take their money out from July 2012 and that might be funds worth $500 million.

Retirement Income Stream products are readily available in most Western countries and can be in the form of:

•  Allocated Pensions
•  Market Linked Pensions
•  Lifetime Pensions aka Fixed Term Pensions
•  Allocated and Market Linked Annuities
•  Fixed Term and Lifetime Annuities
•  Conventional and Managed Annuities
•  Managed Annuities
•  Pension Income Withdrawal

Hensley believes the New Zealand market requires a series of Allocated Pension type products. He says doing so would require the government to make a tax change to ensure tax free status of investment returns, legislative requirements for enforcement of low management fees (suggested approx 90 basis points) and legislative requirements to set minimum percentage drawdown.

He says Allocated Pension products would also need to assume consumption of capital, have switching between funds permitted within reason and for scheme managers to supply choice of investment strategy including a cash or term deposit option.

Hensley also supports the use of a collective investment vehicle to promote retirement savings, though says these should meet the minimum requirements set by the government-mandated KiwiSaver scheme.