Group Super has a clear purpose, ‘a better retirement and confidence along the journey’. The mission of the fund has been defined as ‘higher retirement incomes for our members, current and former Commonwealth Bank employees and their spouses. Delivered in a way that creates justified trust and confidence’.
We have prepared a Retirement Income Strategy (Strategy) to effect the delivery of our purpose and mission in a way that considers the unique retirement needs of our members. The following is a summary of our Strategy.
What the Strategy aims to achieve
The Strategy is focused on members who are retired or who are approaching retirement1. It will achieve and balance the following at times conflicting retirement income objectives:
1. Maximise income – to maximise expected retirement income2 over the period of retirement.
2. Manage risks – to manage expected risks to the sustainability and stability of a member’s retirement income over the period of retirement3. These risks include:
a. longevity risks
b. investment risks
c. inflation risks; and
d. any other risks to the sustainability and stability of the retirement income.
3. Access funds flexibly – to have flexible access to expected funds over the period of retirement.
The Strategy focuses on our members’ needs
Understanding our members, especially their financial needs, will be a continuous part of implementing this Strategy. When preparing the Strategy we began by analysing member information readily available to the fund. We then combined this with information sourced from regulators and other third parties. This helped us understand how our members compare with the broader population. This work has also confirmed some previously held beliefs about our members, and has provided us with some important new insights about our members.
We understand that managing income in retirement will involve multiple decisions and trade-offs. It will be difficult for many members to determine an optimal retirement income strategy by themselves, one that balances the three objectives of maximising income, managing risks and accessing funds flexibly. We have also observed that different members require different levels of support when planning and reviewing their retirement income needs. Some members may want to make their own decisions with no assistance, some may want help as they make their decisions, while others may want us to make decisions for them.
Having considered these factors and the data available to us so far, we recognise that we need more information in order to fully understand how we can best support our members in retirement, and approaching retirement. We expect the ability to collect additional information about our members will improve in future, and our strategy will evolve accordingly.
The Strategy in action
We aim to support members who are retired or who are approaching retirement by:
• Continuing with our primary purpose and mission, which is for ‘a better retirement and confidence along the journey’ and ‘higher retirement incomes for our members…delivered in a way that creates justified trust and confidence’.
• Ensuring current services and products offered to our members approaching retirement and in retirement are effective in helping them meet the three objectives above.
• Recognising different members need different levels of support.
• Where appropriate, enhancing or adding to our current service and product offerings to address any needs identified to improve retirement outcomes for members, including for different sub-groups within our membership.
We actively encourage all members to take positive actions for the benefit of their retirement outcomes. We do this by making a range of services and products available for use by our members in preparing to meet their retirement income needs.
Services we provide
• A dedicated ‘Retirement hub’ on the fund’s website. The hub is for members approaching or in retirement, and contains articles, helpful links, calculators and information on how to obtain advice.
• Education seminars for our members on relevant topics such as ‘maximising super’ and ‘planning for retirement’.
• A tailored ‘super to pension’ communication program to support our members who may be thinking about transitioning to retirement.
• Online calculators to project members’ retirement benefits, and income in retirement, as well as to determine their attitude to risk. These online tools are available through a member’s Group Super Online account.
• Financial advice to our members via a range of channels:
o trained Helpline consultants can provide general advice about our fund and its products
o simple phone based advice4 for our members’ accounts within the fund at no additional cost. This is intra-fund advice
o for members who seek more financial advice about their Group Super account, they have the option to have the fees agreed with their authorised financial adviser deducted from their Accumulate Plus or Retirement Access account.
Products we offer
• A Transition to Retirement Income Stream (TRIS) through our Retirement Access product, an income stream product designed with flexibility for our members transitioning to retirement but not yet fully retired.
• An Account-Based Pension (ABP) through our Retirement Access product, designed with sufficient investment choice options to support the needs of the majority of our members in retirement.
• Defined benefit pensions for a closed group of defined benefit members.
Shortly, we will change our Retirement Access investment options menu. These changes aim to improve members’ retirement income outcomes. We will send members personalised information about these changes, and provide additional support with tailored information seminars.
We will continue to evaluate our retirement products and services, and expand our offering where there is a value-for-money benefit to members.
1 Age 50 has been identified as the age from which our members become more noticeably engaged.
2 Retirement income is defined as ‘income drawn from the fund in the form of a Retirement Access pension or Defined Benefit lifetime pension together with any Age Pension the member is entitled to and any other savings the member has access to from which income can be drawn’.
3 Period of retirement is defined as the ‘period of time commencing when a member first commences a Retirement Access pension or Defined Benefit pension, continuing until the member dies of otherwise leaves the fund’.
4 Advice is provided by Mercer Financial Advice (Australia) Limited (ABN 79 153 168 293, AFSL 411766).