On Friday, Treasurer Josh Frydenberg announced the terms of reference for a review of the retirement income system, which will look at the interaction of compulsory superannuation, the Age Pension and voluntary savings (including home ownership).The Actuaries Institute provided some insight into what we might expect from such a review in a discussion paper released in August.The Treasurer's review will be conducted by an independent panel chaired by Michael Callaghan, a former executive director of the International Monetary Fund and a former senior Treasury official. The other panelists are Carolyn Kay, a finance sector professional, and Deborah Ralston, an academic and member of the Reserve Bank Payment System Board.The panel has been asked to prepare a consultation paper by November and produce a report by June next year.The Actuaries Institute paper, Options for an Improved and Integrated System of Retirement, says the issues that need to be explored include simplifying the Age Pension, addressing the treatment of the family home and embedding automatic adjustments to reflect changes in longevity in both the superannuation preservation age and Age Pension eligibility age.The paper also proposes setting targets for government support in retirement in terms of expenditure, addressing taxation and funding anomalies benefiting unusually large superannuation balances, and better coordinating retirement, pension and age care policies."Australia's retirement income system has obvious shortcomings. It is intrusive, complex, contains anomalies, produces perverse incentives and is sometimes unfair," say the paper's authors - Anthony Asher, David Knox and Michael Rice."The root cause of these problems is the lack of a national retirement strategy, with proper integration of the key elements of the system. Policies and settings have been treated disparately and have not been developed within an overall objective and framework of standards."The basis for the paper's proposals is that the retirement system should provide an appropriate financial resource in retirement. "This would include an income adequate to provide not only for basic needs, but also for a standard of living comparable with what they enjoyed while working," it says.Simplifying means testsUnderlying the current assets test is the principle that social security should not be paid to those with significant means. However, the authors say the approach that has been taken is complex and makes it difficult to plan for a stable income in retirement. Means testing is also intrusive.They suggest that one way to simplify the means test is to reduce the frequency of applying the test. A retiree could be tested at the time they reach Age Pension eligibility age. Based on their assets at the time they could be given a full, part or no pension. This amount could be indexed through retirement. The situation could be reviewed every three to five years.Another option is to get rid of the part pension. Retirees would spend most of their superannuation benefit and any other wealth first and then receive a full Age Pension. Combine the assets and income tests into a single testAustralia is unusual in having both an assets and an income test for