Early next year, the super fund will expand its current post-retirement offering by introducing two new products backed by Challenger’s guaranteed term and lifetime annuities.
According to VicSuper, the products will aim to address longevity risk and provide a “reliable income stream in retirement”.
VicSuper said the decision to expand its post-retirement product range is in response to statistics that indicate retiree funds under management will double to 40 per cent in 2017.
VicSuper chief executive Michael Dundon said its partnership with Challenger is a “progressive move for the super industry”.
“We’re committed to finding innovative solutions to meet our members' changing needs, and partnering with best of breed providers is essential to achieve that,” said Mr Dundon.
He said the annuity products will assist members in “maintaining a comfortable standard of living in retirement by providing certainty of income, flexibility, and peace of mind”.
Challenger chief executive Brian Benari said Challenger was pleased to be VicSuper’s first longevity solution provider and said the pension products will integrate with and complement the super fund’s account-based pensions.