Australia’s second-largest retail superannuation fund has overhauled its retirement income offering, pulling together a multi-partner model to deliver guaranteed income products, investment-linked annuities and tax-effective investment bonds to members and advisers, integrated across its platforms.

The move by the $136 billion Colonial First State comes in the face of convergent forces reshaping the retirement landscape, including regulatory pressure arising from the Retirement Income Covenant; greater adviser demand for integrated retirement tools and products; and the growing reality that most members arriving at retirement face decisions about longevity, drawdown, and income security that generic fund guidance can’t yet adequately solve.

CFS has extended its decade-long platform relationship with Challenger to provide guaranteed and investment-linked pensions, fixed term, lifetime income, and aged care solutions across both CFS platforms, rather than as products that members have to purchase separately, outside the platform environment. 

CFS has also partnered with Generation Life, which already works with BlackRock’s investment capabilities in an alliance formed about a year ago, to bring investment-linked annuities and tax-effective investment bonds into the same integrated environment, giving members access to longevity protection and tax-effective structures alongside account-based pensions without having to deal with separate providers.

BlackRock additionally contributes global insights from its LifePath Paycheck product, which has attracted around US$27 billion ($37.7 billion) in the US to a target-date strategy giving eligible participants the ability to purchase a guaranteed income stream for retirement payable by third-party insurers selected by BlackRock.

A paper on implementing lifetime income solutions in super funds, published by Optimum Pensions last week, says funds can go down one of three pathways when developing retirement income solutions: refer members to an outside party; design and build the entire solution themselves; or partner with providers to co-design and integrate solutions.

CFS Superannuation chief executive Kelly Power tells Retirement Magazine that the organisation has “a long history of partnerships” and an established approach of finding “who is globally best at this, and [working] to either import that capability and offer it to our members and advisers, or to integrate with that capability, and that’s really the pathway we’ve taken here”.

She says a new retirement income modelling capability draws on multiple data sources, with straight-through processing designed to reduce the friction advisers currently face when constructing retirement solutions across disjointed platforms and providers.

Almost four years since the RIC took effect, APRA and ASIC’s November 2025 “pulse check” found the gap between trustees actively improving retirement outcomes and those making only incremental progress was getting wider. One-in-five trustees still provided no information or guidance on drawdown strategies beyond the legislated minimum, leaving members to make their own decisions about how long their money needs to last, and how to manage the risk that it doesn’t last long enough. 

Treasury’s Best Practice Principles for superannuation retirement income solutions propose a minimum of at least three member cohorts as a starting point for developing fit-for-purpose retirement income solutions. But neither the principles nor the regulatory pressure has seen solutions emerge at an industry-wide level.

Power says the design of the CFS solution was driven by what advisers and members were telling the business, not by the regulatory framework per se.

“This work was underway long before [the BPP],” she says. “[We looked] at what our retirees are telling us in terms of what they’re looking for, where there’s gaps, what they’re concerned about. Longevity risk is a legitimate concern for retirees.

“A very significant proportion of our members, based on our research, don’t retire when they choose to. They retire because they have been made redundant, or health issues, and then they might need to re-enter the workforce, or things change. If you want to go back into super, you need to navigate the rules around that. You need help.”

The cohorting question

The BPP and the pulse check both treat cohorting as a prerequisite for delivering fit-for-purpose retirement solutions at scale. APRA and ASIC found most trustees were still refining their cohort frameworks; Treasury proposed minimum cohort numbers as a structuring principle. Power says that cohorting approach in retirement is the wrong model.

“In retirement, that’s not a thing, because… it is entirely personal and individual, like where you live, are you renting, do you have debt, do you have dependents, are you married, what’s your health situation,” power says.

“All of that needs to be factored into the decision you make about how much you draw down [and] where you invest, the risk that you take in terms of investment.”

Power says there’s a distinction between fund-assigned cohorts and member-driven pre-mixed options. Pre-designed options defined by assumptions about who will select them might be seen as performing the same function as cohorting, Power says the approach contained in the BPP is a top-down, “we-know-what’s-right-for-you” philosophy, whereas the pre-mixed options defined by CFS allow members themselves to navigate through individual inputs, supported by digital tools, a general advice guidance team, intra-fund advisers, and, where appropriate, personal advice. 

“When you’re thinking about longevity income streams and locking away your money, that is hard for someone to navigate as an individual,” Power says. 

Layer upon layer

CFS has layered digital tools informed by BlackRock’s global data, pre-mixed options with embedded longevity protection, a guidance team delivering general advice, intra-fund advisers for more complex needs, and a modular personal advice service through Viridian. 

Power says this has driven down the cost of a retirement advice conversation through an arrangement with the advice licensee Viridian to around $1200. CFS made around 1000 referrals to external financial advisers through its Find an Adviser tool in the past year, she says.

Many APRA-regulated profit-to-member funds are building retirement solutions on infrastructure designed primarily for accumulation, and often on administration systems with well-documented legacy issues.

“To be able to build that, do that, and orchestrate that, you need to have pretty sophisticated and modern technology,” Power says, and CFS has spent five years modernising the technology stacks of both FirstChoice and Edge and opening up APIs.

Power says the partnerships and new retirement income products and features will be rolled out over a period of about two years.

“We’ll be dropping down aspects of it by the end of this calendar year. We’ll have the deeming feature in the PDS from May, which is that innovative retirement income solution; then we have the pension bonus going in August; and then we’ll start to build out the partnerships after that.”