The new post retirement product The information contained in this - - PowerPoint PPT Presentation

Seni nior r Partner ner Merce cer Consulti ulting ng

Representative of Mercer Consulting (Australia) Pty Ltd ABN 55 153 168 140 AFS Licence # 411770

“The new post retirement product”

The information contained in this presentation includes general financial product advice which does not take into account your personal objectives, financial situation or needs. Before making any decisions it is important that you obtain personal financial advice from a licensed, or appropriately, authorised financial adviser.

 “The retirement phase of superannuation is underdeveloped and

does not meet the risk management needs of many retirees”

 “The major shortcoming is in respect of the availability of a broad

range of post retirement products that meets the risks faced by retirees.” - Mercer

 Group self-annuitisation (GSAs)

“participants contribute funds to a pool invested in financial assets” “Regular payments … are made to surviving members”

MERCER

The most popular retirement product in Australia

Account -based pension Investment options; often 50/50 or even 30/70 Growth Balanced Conservative Pension to investor/member Cash

The government currently requires a minimum drawdown each year

$0 $10,000 $20,000 $30,000 $40,000 $50,000 65 70 75 80 85 90 95 100 Age

Account count-based based Pension sion

Accou count t based sed Pen ensi sion

• n

Age e Pen ension

• n

ASFA Comfortable

$0 $10,000 $20,000 $30,000 $40,000 $50,000 65 70 75 80 85 90 95 100 Age

Account count-based based Pension sion

Accou count t based sed Pen ensi sion

• n

Age e Pen ension

• n

Biggest fear – running out

• f money

MERCER

Mercer LifetimePlusTM – a GSA Patent pending

• Investors/members participate in a separately invested longevity pool (no change to their
• verall investment risk profile)
• Investors/members share in the surplus (mortality credits) left by others who leave
• Investors/members are rewarded through some return of capital over the long term

Acco ccoun unt-based ed pens nsion

• n

Investment options Growth Balanced Conservative Merce rcer r Lifeti fetime mePl Plus us

• Earni

nings ngs (qua uart rterl rly) y)

• Livin

ing g bonus us (half lf-yearl yearly) y)

• Capit

ital l repayme ment nt (half-yea yearl rly) Pension to investor/member

By investing 25% of their benefit ($100k) in LifetimePlus, the member can expect up to $10,000pa above the age pension after their other super assets run out.

$0 $10,000 $20,000 $30,000 65 70 75 80 85 90 95 100 Age

Mercer Lifetime+

Interest Living Bonus Loyalty bonus

• Delivers a regular, fairly stable return quarterly from the investments
• ‘Living bonus’ every half year (conservative mortality assumptions)
• ‘Capital repayment’ every half year after 15 years

Up t to a age 75:

• 95% of capital invested is returned

After r age 75:

• 95% of capital invested is returned, less distributions after age 75
• Nil once total distributions (after 75) exceed 95% of capital invested
• Addresses the risk of forfeiting invested capital.
• It’s not locked away or forfeited in the event of early death.