Retirement Income Strategy

Retirement Income Strategy
This Strategy supports members who are retired or approaching retirement to manage their retirement income.

The Trustee has formulated this Strategy taking into account member needs, and the requirements of relevant laws under the Superannuation Industry (Supervision) Act 1993 (SIS Act) and Corporations Act. In particular, this Strategy is consistent with the Trustee’s obligations under the Retirement Income Covenant which forms part of Section 52 of the SIS Act.

This Strategy supports members who are retired or approaching retirement to manage their retirement income. It addresses how the Trustee will assist these members to achieve and balance the following objectives:

  • Maximise expected retirement income over the period of retirement.
  • Manage expected risks to the sustainability and stability of retirement income over the period of retirement, including longevity risks, investment risks and inflation risks.
  • Have flexible access to expected funds over the period of retirement.

Fund merger

The Trustee’s key strategic objective is to find a suitable partner fund with which to complete a merger that is in the best financial interests of members. As such, this Strategy applies for the period until a merger is completed.

Trustee determinations

Who’s covered by the Strategy?

All members aged 50 years or over are covered by this Strategy. Younger ‘in-scope’ members can take advantage of the Strategy on a largely self-service basis.

What does retirement income mean?

For the purposes of this Strategy, the Trustee has determined the meaning of retirement income to include:

  • The payments a beneficiary receives from the Fund, whether by drawdown from their account-based pension, transition to retirement (TTR) pension or as a lifetime pension; and
  • The age pension where a member may be eligible based on age and relevant means tests.
What is the period of retirement?

For the purposes of this Strategy, the Trustee has determined the period of retirement is from when a member retires from the workforce (or age 67 if earlier) to the date of the member’s death.

Support for members approaching retirement

The Trustee’s Strategy is to support members as they approach retirement. In particular, the Trustee recognises the importance of assisting members approaching retirement in considering their retirement income rather than solely focusing on their superannuation account balance.

The Trustee provides:

Guidance for members entering and in retirement

The Trustee’s Strategy is to provide guidance for members entering and in retirement. Members need to balance the objective of maximising their retirement income in relation to their desired income stability and sustainability, and flexible access to funds as required. The Trustee recognises that members have different retirement income needs and will prioritise each of these objectives differently depending on their situation.

To assist members the Trustee provides members with:

  • Super to pension journey: Targeted to members 55 and over to inform them of the tools available to help plan for retirement, the availability of transition to retirement and account based pensions and the advice available to help them plan for retirement.
  • Contribution campaign: Targeted to members under age 65 to inform them of the benefits of making additional contributions to their superannuation account each year and educating them on the different ways they can build their account balance and therefore fund their retirement.

Provision of appropriate retirement income products

Until the completion of a merger, the Trustee’s Strategy is to provide appropriate retirement income products which complement members’ other sources of retirement income (e.g. the age pension and other savings).

The Trustee currently provides the following retirement income products for members:

  • An account based pension product, designed with sufficient investment choice and drawdown options to support the needs of the majority of members in retirement.
  • A transition to retirement product, with the same design as the Trustee’s account based pension product, but tailored for pre-retirees and legislative differences related to drawdown rules and tax treatment.

In addition, the Trustee provides defined benefits under Pool B for members as follows:

  • The Retirement Scheme pays benefits as a lump sum, but contributory members of certain predecessor schemes can choose to take all, or part of their employer financed benefit as a lifetime CPI indexed pension (with the remaining benefit components paid as a lump sum). The pension can be taken with or without a reversionary entitlement.
  • The Defined Benefit Scheme pays out benefits as a lifetime CPI indexed pension which can be commuted in full or part within certain prescribed time limits with reversionary entitlements (with the remaining benefit components paid as a lump sum).

In accordance with its product governance policies, the Trustee will monitor whether their accumulation, transition to retirement and account based pension products:

  • Are distributed in accordance with the Trustee’s product design and distribution obligations.
  • Promote the financial interests of beneficiaries as part of the Trustee’s member outcomes framework obligations.