A sharp uptake in QSuper members choosing its pension product has coincided with the provision of greater flexibility to tailor drawdown.
Since December pension payments can be increased annually in line with inflation, while limits on switching and minimum withdrawals have been removed.
Members who are invested across several investment options will now also have greater freedom to take drawdown payments from a particular part of their portfolio.
Michael Pennisi, chief strategy officer at QSuper, said the changes were based on member feedback.
“Our income account is growing at about 17 per cent per annum and there has been a significant uptick in the number of new accounts in the last three months,” he said.
Currently there are 30,000 members in the 530,000 member scheme using the pension income account, who hold $8.5 billion in assets in the $43 billion scheme.
QSuper has been encouraging members to take advice in the hope that this will lead them to choose the ideal mix of investment, income drawdown and insurance for their circumstances.
To this end, the projected retirement income from account balances is now given on all member statements to deter the popularity of lump sums. It has become a key performance indicator of the fund to improve the number of members who are on track to get an adequate retirement.
QSuper is building access to a wide range of retirement products and launched a white labelled annuity from Challenger last year. As soon as the government gives an equitable tax status to deferred annuities, it would consider making those available too.
Those QSuper members that have chosen the white labelled annuity have done so to guarantee a segment of their retirement account.
“The members who have elected to get an annuity have gone through the advice channel either through QInvest or their own personal advisers,” said Pennisi.
“They are using it as part of their holistic plan and they are having a portion of benefits as an income stream. This is a way of insuring they have absolute confidence that is what I am going to get on a fortnightly basis.”
* Michael Pennisi will be discussing QSuper’s pension income product at the Post Retirement Conference at Doltone House, Hyde Park, Sydney on 4th March. To find out more on this event and how to register, click here.