Retirement Income Strategy

Supporting our members in and approaching retirement

This Strategy is designed to support those Plan members (members) who are retired or who are approaching retirement to manage their retirement income. It addresses how the Trustee will assist these members achieve and balance the following objectives:

  1. Maximise expected retirement income over the period of retirement;
  2. Manage expected risks to the sustainability and stability of retirement income over the period of retirement, including longevity risks, investment risks and inflation risks;
  3. Have flexible access to expected funds over the period of retirement.

The Trustee recognises that income in retirement involves multiple decisions and trade-offs, and it is difficult for a member to determine an optimal retirement income strategy.

As the Trustee does not know an individual member’s actual situation or trade-off preferences, the Strategy considers the broad retirement income needs of members covered by the Strategy, not the specific circumstances of individual members.

Trustee Determinations

Members who are retired or are approaching retirement

This Strategy applies to all members who are retired or who are approaching retirement regardless of their Plan division. The Trustee will apply the Strategy to all members who hold interests in the Plan who are aged 50 years or over, with younger “in-scope” members able to take advantage of the Strategy on a largely self-service basis.

Meaning of retirement income

For the purposes of this Strategy, the Trustee has determined the meaning of retirement income to include:

  • The regular pension a beneficiary receives from an account based pension held with the Plan;
  • The age pension where a member may be eligible based on age and relevant means tests.

Period of retirement

For the purposes of this Strategy, the Trustee has determined the period of retirement is from when the member retires from the workforce (or age 67 if earlier) to the date of the member’s death.

Support for members approaching retirement

The Trustee’s Strategy is to support members as they approach retirement, and increase engagement with the services that the Plan provides. In particular, the Trustee recognises the importance of assisting members approaching retirement consider their retirement income rather than solely focusing on their superannuation account balance.  

The Trustee provides:

  • Workplace Advice Sessions and virtual financial seminars – click here to learn more.

    These provide factual information, education and general advice on topics such as superannuation, investment choices, insurance and salary sacrifice options. Sessions are delivered in person and over the phone.

  • Financial Advice Videos covering planning for retirement, available on demand on the Plan’s website – click here to choose a video.
  • Online information covering strategies to increase superannuation account balances, budgeting, planning for retirement and transition to retirement information – click here to find the right information for you.
  • The online Alcoa Lifetime Super Model: Welcome - Alcoa Lifetime Super Model (supercalcs.com.au).

    This allows you to enter your personal information and projects future retirement income levels, account balance, likely Age Pension eligibility and life expectancy probabilities

  • Access to a Mercer Financial Adviser by calling 1800 355 028 to arrange an appointment.

  •  Segmented member communications providing tailored education, support and guidance to members dependent on age (under 50 or over 50).

What’s in the pipeline?

The Trustee will also investigate the feasibility of introducing Retirement Income Projection Statements and whether the Trustee should provide these along with members’ annual benefit statements.

Guidance for members entering and in retirement

The Trustee’s Strategy is to provide guidance for members entering and in retirement. Members need to balance the objective of maximising their retirement income in the context of desired income stability and sustainability, and flexible access to funds as required. The Trustee recognises that members have different retirement income needs, and will place different prioritisation on each of these objectives.

The Trustee will inform members entering retirement of the taxation and other benefits of transferring superannuation accumulation account balances to retirement income products, and periodically remind members over age 67 who retain accumulation section account balances of these potential benefits.

The Trustee will encourage retired members to use the online Alcoa Lifetime Super Model to project future retirement income levels, and their sustainability. Retired members are also able to contact a Mercer Financial Adviser for additional personal financial advice by:

  • Contacting the member services Helpline on 1800 355 028; or
  • Sending an enquiry to Alcoa.Super@mercer.com.

Appropriate retirement income products

The Trustee currently provides an account based pension product which provides a choice of four investment options. The options are designed to support the needs of the majority of members in retirement, and complement a beneficiary’s other sources of retirement income (e.g. the age pension and other savings). These four investment options are Equity, Growth, Capital Stable and Enhanced Cash.

These options reflect the fact that members have different financial needs and no one investment option will suit all members. Members are able to specify the proportion of funds that are invested in each option, and specify a drawdown strategy to be used making pension payments.

In accordance with its product governance policies, the Trustee will monitor whether the retirement income product:

  • Is distributed in accordance with the Trustee’s product design and distribution obligations; and
  • Promotes the financial interests of beneficiaries as part of the Trustee’s member outcomes framework obligations.

Access to advice

Planning for and then managing income in retirement involves multiple decisions and is difficult for many members. The Trustee’s Strategy is built upon support and guidance. However, many members will benefit from professional support and financial advice. The Trustee’s Strategy is to make tailored personal financial advice available to all members in addition to the factual information and general advice it provides. This will be provided by Mercer Financial Advice on a user pays basis.

Assessment of additional product offerings

The Trustee will periodically investigate whether its retirement income product offerings can be extended to better meet the needs of members on a cost effective and sustainable basis. In particular, the Trustee intends to investigate whether its retirement income products should be extended to include:

  • An enhanced account based pension product where members are provided with pre-set combinations of account based pension investment options, managed according to set drawdown and re-allocation rules;
  • Offering lifetime income retirement products through the Plan, whether payable immediately on retirement, or deferred to commence at a later age.

Alcoa of Australia Retirement Plan Pty Ltd ABN 80 065 702 454 RSE Licence L0002974, Australian Financial Services Licence #530684, as Trustee for Alcoa of Australia Retirement Plan ABN 80 928 800 255. This website is provided by Mercer Outsourcing (Australia) Pty Ltd (MOAPL) ABN 83 068 908 912, Australian Financial Services Licence # 411980. The Trustee pays a fee for the provision of this service, however this fee is not conditional on you using this service or acting on the information or advice provided through this service.