POWERED BY MOMENTUM MEDIA
REI Super launches new default strategy
REI Super has launched a new dual-account lifecycle default strategy, which will balance growth and risk exposure of members in line with their age, as it works out how to deal with the growing life expectancy of its member base.
The new strategy would be the default for new entrants to the industry fund’s retirement pension and transition to retirement pension, and existing pension members could opt into the structure.
The strategy would split members’ accounts across the fund’s cash and balanced options with the breakdown between the two dependent on age. The cash option was designed to protect capital for draw-downs during retirement, with the balanced option being the fund’s MySuper default growth-based portfolio.
For members invested in the strategy, their account would be managed as follows:
|
Age |
Cash Option |
Balanced Option |
|
Under 65 |
8 per cent |
92 per cent |
|
65-74 |
10 per cent |
90 per cent |
|
75-79 |
12 per cent |
88 per cent |
|
80-84 |
14 per cent |
86 per cent |
|
85-89 |
18 per cent |
82 per cent |
|
90-94 |
22 per cent |
78 per cent |
|
95+ |
28 per cent |
72 per cent |
Members’ accounts would be rebalanced annually in line with the above age-based structure to ensure a minimum balance in the cash option is maintained.
REI Super chief executive, Mal Smith, said that the “simple yet practical default arrangement” would cater to growing longevity of retirees.
“In constructing both a growth and an income component, it considers retired members’ increasingly long-life expectancies, as well as their need for a measure of certainty and access to secure income,” he said.
“And importantly, we’re tailoring this arrangement to a member’s age, gradually increasing their exposure to cash and reducing their exposure to growth style assets as their investment timeframe shortens.”
Smith acknowledged that some members would still want freedom in managing their investments and said that the new default structure would exist alongside this.
“We appreciate that one size cannot fit all with pension members’ default investment arrangements.
“Our pensioner members who wish to be highly engaged can still mix and match any proportion of their balance. For other members, the default structure provides a regular automatic rebalancing of their portfolio to meet their short-term income drawdown needs.”
Recommended for you
The super fund announced that Gregory has been appointed to its executive leadership team, taking on the fresh role of chief advice officer.
The deputy governor has warned that, as super funds’ overseas assets grow and liquidity risks rise, they will need to expand their FX hedge books to manage currency exposure effectively.
Super funds have built on early financial year momentum, as growth funds deliver strong results driven by equities and resilient bonds.
The super fund has announced that Mark Rider will step down from his position of chief investment officer (CIO) after deciding to “semi-retire” from full-time work.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
76.97 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
76.46 3 y p.a(%)
3
UBS Solactive Global Pure Gold Miners UCITS ETF Dis USD
51.13 3 y p.a(%)
4
Global X GlobalX FANG+ ETF
45.15 3 y p.a(%)
5
Select Baker steel Gold Institutional
43.78 3 y p.a(%)
