Catholic Super has started the process of switching its administration to Mercer, partly to gain flexibility in providing complex retirement products.

The fund has around a quarter of its members in the retirement phase and offers 10 tailored retirement investment options, but it now wants to add hybrid options which give members a measure of longevity insurance as well as capital to invest.

The fund is currently transitioning from its current administrator Catholic Church Insurance, where it is the only superannuation client, to Mercer.

Frank Pegan, chief executive of Catholic Super, is happy with the service the fund currently gets but is looking towards the future. “Mercer will make the provision of these more complex products easier,” he said. “You need a strong administrator who has the capability to keep up to date with technology and product development and whose core business is in this area.”

The retirement phase is of importance to Catholic Super as not only is it currently retaining 85 per cent of members who retire – the average balance at retirement for Catholic Super is over $300,000 – but it is also attracting retirees from other funds. “We run our own financial planning business, so word of mouth gets around,” explained Pegan.

Catholic Super is seeking to add several products that will offer a measure of longevity insurance. It is both looking at current options on the market, such as Mercer’s LongevityPlus, but also at creating its own product.

Pegan said whatever product was chosen it would have to retain a measure of liquid capital. “The thing about Australians is that they want to leave some money for their relatives,” he said. “So, pure annuities do not work. We are looking at products that give you longevity protection and leave some capital for beneficiaries.”