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:
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.
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.
For the purposes of this Strategy, the Trustee has determined the meaning of retirement income to include:
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.
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.
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.
This allows you to enter your personal information and projects future retirement income levels, account balance, likely Age Pension eligibility and life expectancy probabilities
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.
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:
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:
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.
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: