New super product could add up to $95,000 to your retirement
The $38 billion super fund has teamed up with TAL to offer members a lifetime income product while still in the accumulation phase.
Brighter Super has announced plans to deliver a new lifetime retirement income solution designed to enable eligible members to begin building future lifetime income benefits while they are still working.
Brighter Super says the move makes it the first member-owned fund to announce the development of this style of product, which enables eligible members still in the accumulation phase to begin building future potential Age Pension benefits while still enabling choice as to how their super is invested.
The fund says Australia's superannuation system has been highly successful in helping people accumulate retirement savings, but many Australians remain uncertain about how to convert those savings into a reliable income that lasts throughout retirement.
Brighter Super says the solution is designed to help address that challenge by allowing eligible members to begin building future lifetime income benefits during their working years, with greater income certainty and longevity in their retirement years.
By beginning to accrue these benefits during the accumulation phase, members may be able to increase their overall retirement income, potentially improve their Age Pension outcomes depending on their individual circumstances, and gain greater flexibility and choice in how they structure their income in retirement, Brighter Super says.
The fund's modelling suggests members could receive additional income of between $70,000 and $95,000 on average over 25 years of retirement.
Brighter Super chief executive Kate Farrar says the announcement reflected the fund's commitment to helping members achieve better retirement outcomes.
"Australians have become very good at building super balances. The next challenge for our industry is helping people turn those balances into an income that provides confidence throughout retirement," Farrar says.
"Bringing this approach to the member-owned sector is an important step. Rather than waiting until retirement to start thinking about lifetime income, we're helping members begin preparing and maximising future retirement income outcomes while they're still working."
The initiative builds on Brighter Super's growing retirement offering, which it said is a priority. The new solution aims to further strengthen the fund's support for members as they move from accumulating super to using their super to provide an income in retirement.
Brighter Super will develop the solution in partnership with TAL, who will provide the lifetime income guarantee underpinning the retirement solution.
TAL chief executive of group life and retirement Jenny Oliver says the partnership reflects a shared commitment to improving retirement outcomes for Australians.
"We're focused on helping more Australians have a confident retirement. TAL is proud to partner with Brighter Super on this lifetime income solution, because we're passionate about helping more people plan for retirement and enjoy access to savings that can last for life," Oliver says.
The solution will be introduced progressively, with the accumulation feature expected to become available to eligible members in the first half of 2027 and the guaranteed lifetime income option in 2028.
This article first appeared on Financial Standard
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