Section 52(8A) of the Superannuation Industry (Supervision) Act 1993 (SIS Act) requires the Trustee of Qantas Super to document its Retirement Income Strategy (Strategy) and the steps and decisions followed in formulating the Strategy.
The summary below sets out key aspects of our Strategy.
Qantas Super has established this strategy for the benefit of members who are retired or approaching retirement, with the aim of assisting those members to achieve and balance the following objectives:
- to maximise expected retirement income over the period of retirement;
- to manage the expected risks to the sustainability and stability of retirement income over the period of retirement, including longevity risks, investment risks, inflation risks and any other relevant risks;
- to have flexible access to expected funds over the period of retirement.
We recognise that members’ circumstances are different and the best way to balance the above objectives will vary across the membership. In turn, Qantas Super has adopted a three-pillar approach that supports members to make the most appropriate retirement income choices for their own personal circumstances.
Pillar 1: Member education and communication
Qantas Super offers members tailored content in the form of newsletters, webinars, seminars and other resources. Our Learning Hub is designed to help in a number of areas for members who prefer to self-serve. Current examples of topics relevant to retirement include retirement planning, retirement needs, retirement budgeting and the Age Pension. Additional content includes dedicated webpages for ASFA’s Retirement Standard, flexibility of accessing super, insurance (up to age 70), contribution strategies and investment choice. The information provided to members is regularly reviewed to ensure it is topical and relevant and engaging.
Qantas Super’s Learning Hub also provides member education resources, including budgeting tools, expenditure calculators to identify income and capital needs over time. The educational material is designed to educate members on some of the key risks that they will face in retirement (e.g. investment, longevity, inflation) and how these can be mitigated or managed. The Learning Hub also provides factual information about key retirement topics, such as eligibility for the Age Pension, the types of Income Accounts available and availability of general or personal financial product advice.
In addition, Qantas Super provides a retirement calculator to help members project retirement balances and simulate retirement incomes. The calculator is designed to estimate total retirement income, including anticipated benefits from the Age Pension and non-super investments. The calculator refers to reasonable long-term assumptions with respect to investment returns and inflation, which can be modified by the member.
Pillar 2: Help and advice
Qantas Super offers members in or approaching retirement access to a range of advice options at no additional cost, from an in-house team of licensed advisors. Members with more complex needs have access to comprehensive advice through Qantas Super’s partnership with Guideway Financial Services. Examples of relevant advice topics include investment and drawdown strategies. Additionally, advice topics cover the Age Pension including asset tests, income tests and the impact of deemed income.
Pillar 3: Product solution
Qantas Super offers Gateway Income Accounts for Retirement Members and Transition to Retirement Members. Gateway Income Accounts offer investment and drawdown strategies that prioritise retirement incomes ahead of passing on wealth to the next generation.
Gateway Income Accounts also offers investment choice, so that Members can choose an investment option that best suits their own risk appetite.
Investment and inflation risks are predominantly managed through the robust offering of diversified investment options to cater to all risk profiles. Except for the low-cost Thrifty investment option, Qantas Super’s non-cash investment options are all actively managed. Further, Qantas Super’s advice offering supports risk management which can be tailored for each member.
New income accounts for Retirement Members may be eligible for a discretionary pension bonus which is currently capped at 0.7% of the opening balance, up to the Transfer Balance Cap. This bonus reflects the tax saving that occurs when members transition from an accumulation account to an account-based pension.
Review of the strategy
This Strategy will be reviewed at least every three years and may be reviewed earlier as determined by Qantas Super, for example on the occurrence of any one of the following events:
- a significant change to the Plan’s demographics;
- an event or circumstance arising from the annual Member Outcomes and Business Performance Review assessments;
- a significant change in the market in post-retirement products that Qantas Super considers could have a material impact on the strategy; or
- relevant legislative or regulatory changes which would require earlier updating of the strategy; for example, on the introduction of a Prudential Standard or guidance on retirement incomes or if the Regulator requires a change to the strategy.