Cementing its position as a leader in the retirement space, TelstraSuper has launched an innovative retirement income product designed to give retirees more confidence to spend their income without fear of their retirement savings running out or being eroded by inflation.
The new product – known as TelstraSuper’s RetireAccess Lifetime Pension - provides a guaranteed income for life, with the option of being indexed for inflation or market-linked and blended with a member’s existing account-based pension.
TelstraSuper CEO Chris Davies said the Lifetime Pension had been developed to meet the well-recognised need – and principles in the Retirement Income Covenant - for superannuation funds to provide more choice and flexibility for retirees seeking income certainty.
“We know that many retirees are living more frugally than they need to because they fear their savings won’t last the distance or that their spending power will be eroded by higher costs of living,” Mr Davies said. “Our Lifetime Pension provides a layer of income protection whilst also helping to maintain savings when used in conjunction with an account-based pension from the fund. It’s the final piece in the retirement puzzle.”
Importantly, the Lifetime Pension has built-in protections to ensure that members retain access to capital over a long period, based on life expectancy. If members need to withdraw, or if they pass away during the withdrawal period, access is available, reducing a common concern for retirees interested in lifetime income products.
In addition, only 60 per cent of the amount invested counts towards the Age Pension assets test until age 84, or for a minimum of five years, (after which only 30 per cent counts) – meaning it can be particularly beneficial for part-pensioners or those just missing out on the pension.
“Under most scenarios, asset tested part-pensioners taking out a Lifetime Pension will see their Age Pension payments increase, and for some retirees it could enable them to qualify for a part-pension and the associated Pensioner Concession Card that comes with a range of benefits.”
The Lifetime product was designed in partnership with Challenger, Australia’s leading provider of guaranteed retirement income.
Nick Hamilton CEO and Managing Director, Challenger said:
“We are delighted to partner with TelstraSuper on the first profit-to-member guaranteed lifetime income stream since the commencement of the Retirement Income Covenant. This innovative partnership has enabled TelstraSuper to offer its own CPI and market linked lifetime income streams as part of its broader retirement offering.
Australians face a unique set of risks in retirement and it’s critical we work together as an industry to ensure retirees have the options to feel financially secure and confident to spend their retirement savings as they see fit.”
Mr Davies said the fund expected the Lifetime Pension to prove particularly popular with retirees who also qualified for the Age Pension – currently a large portion of the fund’s members.
“We think this income-layering approach – whereby our members can effectively draw income from three sources: an account-based pension, the Lifetime Pension, and the Age Pension – will become increasingly popular as more people recognise the potential financial and lifestyle benefits of this strategy,” he said.
The Lifetime Pension complements other recent enhancements to TelstraSuper’s retirement offering including a new high growth investment option, extending access to the fund’s self-managed platform Direct Access, and providing aged care funding advice through TelstraSuper Financial Planning.
“Whether it’s picking one of our pre-mixed investment options designed specifically for retirees, guaranteed income, or even the option to self-manage, TelstraSuper members have choice and control about their money,” said Mr Davies.
Background
The Lifetime Pension is designed to work in conjunction with TelstraSuper’s account-based pension to help retirees receive more income, for longer with greater certainty. A typical scenario could be a retiree investing 30 per cent of their retirement savings into the Lifetime Pension, with the remaining 70 per cent invested in the fund’s account-based pension.
TelstraSuper is now a public offer fund, meaning it is open for everyone to join – even if you’ve never worked at the Telstra group.
“We’ve already been recognised as a leader in the retirement space and are confident that both existing and potential members can benefit from our strong retirement offering,” said Mr Davies.
TelstraSuper was named the Pension Fund of the year in the 2023 Chant West Awards for the second year in a row. This follows on from being named the 2023 Super Ratings Pension of the Year.
For further information please contact
TelstraSuper Communications Consultant Janet de Silva 0448 000 499 | janet.desilva@telstrasuper.com.au
Challenger Head of External Communications Felicity Goodwin 0461579782 | fgoodwin@challenger.com
About TelstraSuper: TelstraSuper is an award winning profit-to-member super fund that anyone can join. We support our members to grow and protect their retirement savings with an emphasis on competitive fees and providing a leading member experience. Learn more at telstrasuper.com.au
Any general advice in this press release has been prepared without taking into account your objectives, financial situation or needs. Before you act on any general advice in this press release, you should consider whether it is appropriate to your individual circumstances. Before making any investment decision, you should obtain and read the relevant product disclosure statement which is available on the Website or by calling 1300 033 166. You may wish to consult an Adviser before you make any decisions relating to your financial affairs. To speak with an Adviser from TelstraSuper Financial Planning call 1300 033 166.
About us:
TelstraSuper is an award winning profit-to-member super fund that anyone can join. We support our members to grow and protect their retirement savings with an emphasis on competitive fees and providing a leading member experience. Learn more at telstrasuper.com.au
Contact details:
TelstraSuper Communications Consultant Janet de Silva 0448 000 499 | janet.desilva@telstrasuper.com.au
Challenger Head of External Communications Felicity Goodwin 0461579782 | fgoodwin@challenger.com
