Retirement Income Strategy

In accordance with the Superannuation Industry (Supervision) Act 1993 (Cth) (the Act) Christian Super Pty Ltd (the Trustee) is required to formulate a strategy for the benefit of beneficiaries of Christian Super (the Fund) who are retired or who are approaching retirement, and must address how the trustee will assist those beneficiaries to achieve and balance the following objectives:

  1. to maximise expected retirement income over the period of retirement;
  2. to manage expected risks to the sustainability and stability of retirement income over the period of retirement including:
    1. longevity risks;
    2. investment risks;
    3. inflation risks;
    4. any other risks to the sustainability and stability of retirement income; and
  3. to have flexible access to expected funds over the period of retirement.

This is collectively referred to as a Retirement Income Strategy (Strategy), which the Trustee shall give effect to in the manner outlined below.

 

Key Definitions

The Trustee has defined the following key terms to fulfill its obligations under the Act.

For the purposes of this Strategy, the Trustee defines Retirement Income as income, net of tax, which is received during the period of retirement through:

  1. income paid from, or supported by, a superannuation interest in the Fund; and
  2. income from an age pension under the Social Security Act 1991.

As part of this Strategy, the Trustee will seek to determine if it should include income from any other source as appropriate.

For the purposes of this Strategy, the Trustee determines the meaning of Period of Retirement to be from preservation age until the death of a beneficiary. The Trustee does not adopt a fixed end age approach, as such a strategy will not be able to maximise retirement income for a significant proportion of members; though a fixed end age approach may be used to inform the effectiveness of certain products.
The Trustee will, as part of this Strategy, seek to appropriately model a better measurement for relevant beneficiaries of the Fund, to best provide for these beneficiaries during their retirement.
For the purposes of this Strategy, the Trustee considers the relevant Class of Beneficiaries who are retired or who are approaching retirement to be those aged 45 and over regardless of gender, allowing beneficiaries a reasonable period to prepare before reaching preservation age. This excludes beneficiaries who:

  1. only hold a defined benefit interest in the Fund; or
  2. are not eligible to commute that benefit (whether during the period of retirement or otherwise).

As part of this Strategy, the Trustee will seek to validate this view with consideration of various membership demographics including but not limited to:

  • age;
  • gender;
  • account balance;
  • employment status;
  • condition of release requirements; and
  • planned retirement statistics.

The Trustee does not currently identify any sub-class of beneficiary.

 

Outcomes and Needs

The Trustee has historically assessed retirement outcomes for the relevant class of beneficiary through their likelihood to achieve a comfortable retirement under the ASFA Retirement Standard.
As part of this Strategy, the Trustee will seek to develop a more comprehensive methodology for the calculation of outcomes in line with its definition of Retirement Income and Period of Retirement.
When surveyed, beneficiaries of the Fund indicated the following needs:

  1. the majority of participants expect to use a product which pays regular dividends;
  2. the majority of participants were concerned about not having enough money in retirement.
  3. 7% of participants selected knowledge that their investments are invested in line with their values as being an important factor when it comes to the selection of superannuation and retirement products; and
  4. 9% of participants selected certainty and predictability as being an important factor when it comes to the selection of superannuation and retirement products.

As part of this Strategy, the Trustee will seek to further validate the needs outlined within this Strategy and assess any other needs that the Class of Beneficiary may have.

Current Offering

As stated in the Fund’s Product Framework, to assist its beneficiaries in attaining a fulfilling retirement lifestyle, the Fund provides a tax-effective investment and payment facility to meet the needs of individuals who have reached their preservation age; these products are collectively referred to as Post-Retirement (Decumulation) Products. These products are sufficiently flexible to meet the broad needs of beneficiaries and include:

  • a range of investment options (covering both pre-mixed investment strategies and single asset class strategies);
  • a range of payment frequency options, including large once-off payments; and
  • facilities to allow a portion of their vested benefit to be invested in illiquid investment strategies, while a remaining portion be left in liquid investment strategies to be drawn upon periodically.

These Post-Retirement (Decumulation) Products take the form of both an Account Based Pension and Transition to Retirement Account.
The Trustee’s assessment of this offering is that whilst these products are fit for purpose under both the Product Framework and Financial Advice Policy, they do not (for various reasons) meet every retirement outcome and need for the Class of Beneficiary listed in this Strategy, or the overall objectives of this Strategy.

The Trustee seeks to address this by amending its current offering to:

  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:
    1. longevity risks;
    2. investment risks;
    3. inflation risks;
    4. any other risks to the sustainability and stability of retirement income; and
  3. have flexible access to expected funds over the period of retirement.

 

Key Dates

With the Fund’s current strategic direction, the timeframe for implementation of this Strategy is dependent wholly on a potential Successor Fund Transfer (SFT). The Trustee acknowledges that in the event of an SFT, the fundamental demographics behind this Strategy will necessarily change. Given this, the Trustee will implement this Strategy as the Fund’s broader strategic direction becomes clearer, or may forego the pursuit of this Strategy and adopt the strategy of a partner fund.
The following implementation timeframe is therefore subject to change.

Item Implementation Date
Data Collection June 2023
Validation of the Trustee’s Key Definitions December 2023
Validation of Outcomes and Needs December 2023
Exploration of Options to Amend the Current Offering July 2024
Amendment of the Current Offering December 2024

Key roles in the process will be identified once the Fund’s strategic direction is clear.
 
This is a summary of the Fund’s Retirement Income Strategy which was approved by the Trustee Board on 10 June 2022.