As industry funds continue to be criticised for slow progress on meeting their Retirement Income Covenant obligations, another retail platform has brought a solution to market.
HUB24 is developing a lifetime retirement solution with life insurer TAL, the latest move from a platform in the retirement space.
Expected to launch first half of 2026, the product aims to address as existential issue for retirees: the fear of running out of money.
The move by HUB24, which has been rated by several industry researchers as one of the top platforms and the market leader in competitive flows, comes as its industry fund rivals look to fulfill their obligations under the Retirement Income Covenant and as several of the other major retail platforms aim to position themselves in the retirement space.
Insignia Financial-owned MLC Super partnered with TAL and Challenger for its own retirement income product, announced just a few months ago, while AMP launched its MyNorth Lifetime product in the second half of 2022.
However, three years on from the commencement of the Retirement Income Covenant, government and regulators remain concerned about the slow progress by industry funds.
Australia has received global recognition for its superannuation system which has mastered the accumulation stage but has been underwhelming for its approach to decumulation.
According to the latest Mercer CFA Institute Global Pension Index, Australia’s pension system design is being held back from achieving a top rating because of a lack of focus on retirement income as its primary purpose.
HUB24’s product aims to function like other retirement solutions coming to market by offering consistent income, while also seeking to maintain the highest eligibility for means-tested government benefits such as the Age Pension.
Furthermore, data from HUB24 found that 52 per cent of pension members are only withdrawing the legislated minimum pension amount to manage their longevity risk.
The Conexus Institute’s* 2025 State of Super report found retirement represents a key commercial thematic for both industry funds and retail funds over the coming decade, with member services and adviser relationships expected to determine the winner.
“Those platforms that service retirees are in natural outflow; it’s their job to pay out pensions,” David Bell, executive director of The Conexus Institute, told Professional Planner sister publication Investment Magazine earlier this year.
“For them, it’s imperative that they find new clients, and financial advisers are the conduit for that.
“And then on the other hand you’ve got not-for-profit funds with members approaching retirement with bigger and bigger balances and expecting higher and higher service levels. And that’s where they’re getting picked off.”
*The Conexus Institute is a not-for-profit think-tank philanthropically funded by Conexus Financial, publisher of Professional Planner.
