The Real Lifetime Pension allows the superannuation fund to offer a retirement income solution with lower fees than comparable products currently available. It does this by using the fund’s existing investment management and administration resources, and existing infrastructure and services already used by the fund.

The Real Lifetime Pension is an investment-linked immediate or deferred lifetime pension, with choice of investment options allowing it to invest in higher performing assets than a conventional annuity. It offers higher (up to 30% higher) pension income than conventional lifetime annuities and avoids the sequencing and asset/liability mis-matching risk normally incurred by the pension provider.

Used in isolation or in combination with an account-based pension it offers income for life, helping to solve the financial needs when living a long life. It allows members to choose and switch between investment options at any time, including those that have a suitable exposure to long term growth assets, and can therefore maintain income in real terms over the long term. Additionally, it also avoids the need to lock in low yields for life, which is a concern that financial advisers have with traditional lifetime annuity products.

The Real Lifetime Pension allows superannuation funds to transfer longevity risk to an insurer.

The Real Lifetime Pension allows retirement assets to be kept within the member’s current superannuation fund – and not be transferred to a competitor superannuation fund or life insurance company. It also allows the fund to better engage with their members for life, extending their membership of the superannuation fund and retaining the Funds Under Management.

Depending on the investment options chosen by the member, lower fees and higher returns might allow the Real Lifetime Pension to broadly keep up with and stay ahead of inflation over long periods. We’ve also designed optional individual smoothing and reserving strategies to help offset shortfalls in income when they occur.

The Real Lifetime Pension permits members to choose investment options with a suitable exposure to long term growth assets, providing greater inflation protection and to switch between available options. Depending on how this might be used, it could provide some down-side protection and increased upside capture of investment performance

The Real Lifetime Pension is offered as both an immediate pension payable to the member and any spouse or partner, with a choice of minimum payment periods (to ensure that a large part of the investment can be returned on an unexpected early death) and a deferred pension with a choice of death benefits before the pension starts.

Also, members may effect a “Money Back” option which ensures that on the event of a member’s and their partner’s deaths, and after taking the pensions paid to date into account, their beneficiaries will receive at least 100% of the initial purchase price.