Agree,Interesting interview by the Pensioner and Super association, they are trying to both get govt to correct its error and also encourage those retired on savings to consider other forms of investment.Which means taking on more risk.
Not that long ago someone approaching retirement was advised to switch to a conservative fund which was fine when a Term Deposit returned 8%. The ASX200 is back to pre GST highs and hasn't that been one long slog. Now what 65 year old is brave enough to move most of their super into equities when the market is at its highest.
The more returns the more risk, but nothing is risk free and the word "risk" is often treated as holistic.
The days of 8% Term Deposits are gone for the foreseeable future, and there is not alot the Australian govt can do about it as low inflation is a global issue. Those developing countries offering 8% or better usually have underlying inflation not far behind. But also consider it was never about the actual interest rate, its interest rate - inflation rate differential, so at 8%, they likely got 3% above inflation. Today it would be 1-1.5%.
The complex issue is that your dealing with people who for some/many are vulnerable, lived mostly in an era where life was often less complex with fewer options and have seen people being ripped off or loosing the lot in the past. As the guy said on the radio, if we get ripped off, we cannot go and work again. Once its gone, its gone.
So what do we/they do? These people live today, not the pre-90's.
As you said conservative Funds are an option and as I pointed out before, Fixed Interest rate Funds are delivering 4-6%pa and over inflation this puts you back in the 3% range. The govt also does need to get involved in some way to protect these people.