Equip will introduce Equip MyPension on 1 July 2014, a retirement income solution informed by the needs and priorities identified in member research commissioned by the fund last year.
Members said they wanted a retirement product that combined the flexibility, accessibility and control of capital provided by an account based pension, and also helped them manage their income and investments to provide an income for as long as possible, preferably right through retirement.
Equip Chief Executive Officer, Danielle Press, said that the key questions and concerns for members approaching retirement were whether they had enough super and the skills and knowledge to make the most of their benefit.
“Equip MyPension packages the benefits of an account based pension with a built‐in strategy modelled on the financial advice we would provide to our financial planning clients. It is a retirement income package principally designed for those members who plan their retirement without seeking advice.
“While we encourage members to seek professional advice as they head into retirement, the reality is that only two or three out of every ten Australians seek professional advice.
“Equip MyPension will suit members whose financial affairs are relatively straightforward. They will likely have a superannuation benefit of between $100,000 and $600,000, own or be close to owning their home, and their super will probably be the largest asset they have other than the family home,” she said.
Equip MyPension builds on the so‐called three‐bucket strategy used by financial planners, with the member’s superannuation benefit split between three of Equip’s current investment options, Cash, Conservative and Growth.
The Cash component will provide assured income over the shorter term, while the Conservative will help even out medium‐term market volatility and Growth will be the engine for extending the longevity of the pension.
The allocations across investment options for each individual Equip MyPension member will be rebalanced each year. As with a normal account based pension, members can make lump sum withdrawals at any time to meet one‐off expenses.
“Generally, our members indicated they did not want to hand their money over in return for an annuity‐type income stream. They were concerned about the loss of flexibility and control of capital if their needs changed and, if they died early, their inability to pass on any benefits to their dependants or surviving family members,” Ms Press said.
She said Equip MyPension was aligned with the fund’s focus on providing education, advice, products and services that cover the entire member journey through retirement rather than just to retirement.
“Equip’s demographic includes a significant proportion of members with substantial benefits and an increasing proportion of our membership heading towards retirement.
“This makes it logical and ideal for us to take a leadership position in thinking about solutions that deliver confidence and security for members through retirement,” Ms Press said.
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