UniSuper, the $50 billion superannuation fund for the higher education and research sector, has unveiled plans to launch an innovative, integrated Comprehensive Income Product for Retirement (CIPR).
The flagship super and pension solution, called FlexiChoice, will be an innovative lifetime retirement income solution, unique in the Australian market. It will address key retirement issues around longevity and sequencing risk and has been designed to provide members with access to a default lifetime pension on retirement and greater flexibility during the accumulation phase.
Developed in close consultation with members, universities and unions, the announcement follows the Federal Government’s support of the Financial Services Inquiry recommendation calling on the superannuation industry to develop CIPRs to improve outcomes for retirees.
FlexiChoice is a product that will fit underneath the broad CIPR banner, giving UniSuper members access to a lifetime pension at retirement, an option not presently available to members of many other superannuation funds.
The new product builds on UniSuper’s proud history of providing pooled retirement savings products and its record of strong long-term investment performance.*
Kevin O’Sullivan, UniSuper’s Chief Executive Officer, said providing greater security of retirement income and protection against outliving one’s savings are key objectives for both the superannuation industry and the Government.
“UniSuper’s development of FlexiChoice represents a major shift in the way individual superannuation funds create products specifically to address how superannuation can deliver retirement solutions for members,” Mr O’Sullivan said.
“Our scale, distinct member base and deep employer relationships enable us to truly understand the needs of our members and to be able to develop such an innovative product solution.”
FlexiChoice will bridge the traditional gap between superannuation and pension products. It is both a super product – providing flexibility for members saving for retirement; and a pension solution – delivering greater certainty in retirement for members.
The new product will provide eligible members with access to a lifetime retirement income pension combined with the flexibility to increase or decrease contributions, allowing individuals to manage competing financial obligations throughout different life stages while continuing to save for retirement.
“With changing work patterns, there is a need for more flexible super and pension solutions to reflect individual priorities during different life stages,” Mr O’Sullivan said. “The lifetime retirement income pension will address two of the key issues facing Australian retirees: investment risk and longevity risk.”
“Historically, traditional defined benefit funds have been largely inflexible, forcing individuals to ‘pick and stick’ to one style of superannuation. With FlexiChoice, members will be able to select the style that suits their current life stage and adjust that as circumstances evolve.”
UniSuper expects to open FlexiChoice to members in 2017/2018, using the interim period to make the necessary system and process changes, educate members and support employers in transitioning to the new product.