Melinda Howes
AMP has announced the designed to help millions of Australians unlock more income in retirement – without changing how their super is invested and without additional fees.
By utilising Centrelink concession rules, the feature reduces the amount of super counted in the age pension assets test – potentially increasing entitlements and retirement income by more than $100,000 in the first 10 years of retirement. The younger Australians take advantage of the feature, the greater the potential income uplift in their retirement.
AMP Super Lifetime’s transformative income generating qualities were recognised this week with the Chant West’s Innovation Award, building on the success of AMP’s multi-award-winning MyNorth Lifetime income solution.
Melinda Howes, AMP’s Group Executive, Superannuation & Investments, said that AMP Super Lifetime is a smart and efficient way for members to get more out of their superannuation.
“This is a breakthrough innovation for the superannuation industry and, most importantly, our members – a simple, no-cost feature that can significantly increase retirement income and improve access to the Age Pension. It’s designed to quietly work in the background, using Government rules to unlock more income when it matters most.
“This is another important step in AMP’s commitment to helping more Australians retire with confidence. With AMP Super Lifetime, we’re giving our members the opportunity to make their super work harder without lifting a finger – no changes to how their money is invested and no added fees.”
- Once activated, AMP Super Lifetime runs automatically in the background of a member’s super account, creating a ‘concessional’ balance. Members incur no additional fees, and the member’s actual super balance is unaffected.
- This ‘concessional’ balance uses the deeming rate as its growth rate, instead of the actual return of the super fund. This deeming rate is currently 2.25% and is set by the Government.
- Over time, this is expected to create a ‘concessional’ balance that is lower than the member’s actual super balance. This ‘concessional’ balance is referred to by the Government as the Purchase Price.
- At retirement, the member can choose to move some of their super into an AMP Lifetime Pension account, designed to provide income for life and to work alongside the AMP Super Allocated Pension.
- When Centrelink assesses the member’s eligibility for the age pension, it uses the lower ‘concessional’ balance for the portion invested in the AMP Lifetime Pension, instead of the member’s actual super balance. This may help the member qualify for more Age Pension, boosting their income in retirement.
- With increased certainty and financial confidence, many retirees may in turn choose to draw a higher income from their AMP Allocated Pension, further boosting income and improving quality of life in their earlier active retirement years.
Ben Hillier, AMP’s Director of Retirement, said: “For many Australians, AMP Lifetime Super could mean tens of thousands of dollars in extra retirement income compared to traditional account-based pension. It’s a highly effective and simple way to improve quality of life in retirement.”
AMP Super Lifetime is initially available to members under the age of 58 and who have not met a full condition of release in their account. Eligible AMP Super Choice members have had the feature automatically added to their account, while eligible MySuper members have the option to add the feature.