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Christine St Anne is Morningstar's online editor. This article was originally published for inFinance, a journal for members of the professional association Finsia.

Post-retirement was one of the big issues explored at the annual Conference of Major Superannuation Funds in Brisbane this year.

Speaking on the topic, Professor Michael Drew of Griffith University recounted a story about how he recently spoke to a group of Commonwealth public servants on the issue of their superannuation.

All the public servants present were not only in defined benefit plans (as expected) but all knew exactly what they would be getting in retirement.

Drew noted they were among the very few Australians that were not dependent on the volatile returns inherent in a defined contribution system. Indeed, Drew made the salient point that most Australians today wear the risks of their superannuation investments.

Australia's compulsory superannuation system, which began a little over 20 years ago, is credited with providing a national system of retirement savings.

However, because of its defined contribution schemes, members of superannuation funds effectively take on the risks of investments made on behalf of their funds.

Lately, there has been growing debate about how well superannuation funds have been managing investments. In particular, the role of equities in superannuation has come under increasing scrutiny given these funds have always had a distinct overweight to growth assets such as equities.

Industry participants like the former treasury secretary Ken Henry, former chair of the Future Fund David Murray and former federal finance spokesperson Lindsay Tanner, have all spoken publicly about the need for superannuation funds to rethink their exposure to equities.

Henry noted that funds needed to boost their allocation to fixed-income products such as bonds, particularly now a substantial cohort of baby boomers is set to retire.

Around 5.5 million of these baby boomers are starting to reach the pension eligibility age of 67. According to research by Watson Wyatt, $500 billion of baby boomer money is invested in the larger superannuation funds, while $300 billion is invested in small superannuation funds.

Appropriate asset allocation is a significant challenge for Australia’s $1.2-trillion superannuation industry.

For one of the chief architects of Australia's trillion-dollar superannuation system, now is the time for policy ammunition and imagination.

Former prime minister and federal treasurer Paul Keating, himself a baby boomer, acknowledges the breadth of this challenge saying "baby boomers will want to retire to a life to which we are accustomed".

In my recent book about the superannuation industry, A Super History, Keating spoke out about some of the biggest policy challenges for the industry, including post-retirement.

He believes the tax system should encourage annuities instead of lump sum superannuation payments and that the superannuation industry is underinvested in debt instruments.

"There is too much in equity and too little in longer-term fixed-interest security. Until the nature of the superannuation industry changes, the ability of the industry to provide a source of annuities will be diminished," he said.