In a statement, Mercer said the new product, LifetimePlus, could be added to an account-based pension within a customer’s super fund.
"It’s anticipated retirees would invest around 25 per cent of their super retirement benefit into Mercer LifetimePlus: a customer who invests $100,000 from a $400,000 super balance could expect up to $10,000 per annum above the age pension after their super runs out,” the statement said.
Mercer’s managing director David Anderson warned that longevity risk was a “huge threat to Australians' quality of life and healthcare in retirement".
“Australia is facing a very real economic and social dilemma due to a lack of protection against longevity risk up until now," he said.
According to the statement, Australian retirees are likely to outlive their savings by more than five years on average and one in four will outlive their savings by 11 years.
"Retirement will be a financial challenge for a lot of people," Mr Anderson said.
"Removing a degree of uncertainty for people planning for retirement, which is exactly what Mercer LifetimePlus can do, will make life much easier now and in the future."
CEO of VicSuper Michael Dundon praised the new investment option as an "innovative product development" in the retirement space.
"An adviser-led, income-layering approach to building a member’s retirement portfolio can provide the best outcome for our members," he said.
