Legalsuper – a superannuation fund for Australia’s legal community – announced on Wednesday it has expanded its catalogue of retirement products by products adding Challenger-guarantee income accounts.
Two types of guaranteed-income accounts – lifetime and fixed-term – are available to members over 60 with a balance of at least $20,000. They provide income regardless of how investment markets perform, and can be paid monthly, quarterly, half yearly, or annually.
“The Murray Report’s recommendation and subsequent response from Government have thrown down a clear challenge to the industry to deliver comprehensive income products,” said Andrew Proebstl, chief executive of legalsuper.
According to the report, superannuation assets are not being efficiently converted into retirement incomes due to a lack of risk pooling and over-reliance on individual account-based pensions. “The superannuation system is not operationally efficient due to a lack of strong price-based competition,” it said.
Citing 2015 research from Marketing Pulse, Proebstl said 65% of financial advisers expect the availability of annuities through major investment platforms will increase the use of annuities by financial planners.
“As our members’ balances continue to grow due to contributions and strong investment performance, we expect member interest in guaranteed income accounts to increase,” he said.
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