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”
The most popular retirement product in Australia Account -based pension Investment options; often 50/50 or even 30/70 Growth Conservative Balanced Cash Pension to investor/member The government currently requires a minimum drawdown each year MERCER
Account count-based based Pension sion $50,000 ASFA Comfortable $40,000 $30,000 Accou count t based sed Pen ensi sion on $20,000 Age e Pen ension on $10,000 $0 65 70 75 80 85 90 95 100 Age
Account count-based based Pension sion $50,000 Biggest fear – $40,000 running out of money $30,000 Accou count t based sed Pen ensi sion on $20,000 Age e Pen ension on $10,000 $0 65 70 75 80 85 90 95 100 Age
Mercer LifetimePlus TM – a GSA Patent pending Acco ccoun unt-based ed pens nsion on Investment options Growth Conservative Merce rcer r Lifeti fetime mePl Plus us Balanced • Earni nings ngs (qua uart rterl rly) y) Pension to investor/member • Livin ing g bonus us (half lf-yearl yearly) y) • Capit ital l repayme ment nt (half-yea yearl rly ) • Investors/members participate in a separately invested longevity pool (no change to their overall 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 MERCER
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.
Mercer Lifetime+ Interest Living Bonus Loyalty bonus $30,000 $20,000 $10,000 $0 65 70 75 80 85 90 95 100 Age 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. •
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