Super fund targets lifetime income for members

Brighter Super is developing a retirement income product that allows eligible members to begin building lifetime income benefits before they retire, tackling one of the superannuation system’s biggest challenges.

Retirement Income Solution

The proposed solution would enable members to accrue future lifetime income benefits during the accumulation phase, while maintaining flexibility over how their super is invested.

It is designed to provide greater certainty in retirement, potentially improve Age Pension outcomes depending on individual circumstances, and give members more choice in how they structure their retirement income.

According to the report, if successful, the initiative would make Brighter Super the first member-owned super fund to announce the development of this style of retirement product.

Benefits of the Initiative

Brighter Super’s modelling indicates members could receive between $70,000 and $95,000 in additional income on average over a 25-year retirement.

Chief executive Kate Farrar said the industry’s focus now needed to extend beyond helping Australians build larger super balances.

Australians have become very good at building super balances. The next challenge for the industry is helping people turn those balances into an income that provides confidence throughout retirement.

Kate Farrar said allowing members to begin preparing for retirement income while they remained in the workforce represented an important step for the member-owned sector.

Bringing this approach to the member-owned sector is an important step, as it helps members begin preparing and maximising future retirement income outcomes while they’re still working.

Partnership with TAL

The retirement solution is being developed in partnership with TAL, which will provide the lifetime income guarantee underpinning the product.

TAL chief executive, group life and retirement Jenny Oliver said the partnership was aimed at giving more Australians greater confidence in retirement.

They’re focused on helping more Australians have a confident retirement. TAL is proud to partner with Brighter Super on this lifetime income solution, because they’re passionate about helping more people plan for retirement and enjoy access to savings that can last for life.

Brighter Super said the accumulation component is expected to become available to eligible members in the first half of 2027, with the guaranteed lifetime income option planned for 2028.

Additional details, including eligibility requirements and how the accumulation feature will operate, will be released as development progresses.