So poorly are retirees served by the super system that Australia's leading longevity research organisation is suggesting the government step in and offer policies of its own through Australia Post.

The Centre of Excellence in Population Ageing Research is the government’s preferred researcher on ageing and superannuation, funded by the Australian Research Council.

"The most common reported use of lump sum spending is paying off home": John Piggott.

In a submission to the financial system inquiry to be published on Monday, the Centre says Australia is one of the few countries in the developed world to have outsourced its retirement income system to the private sector.

But it says the private sector funds either can’t or won’t bear the risk of working out how long their customers will live, so pass it back to them via inadequate products.