Brighter Super unveils lifetime income solution

Brighter Super announced plans to deliver a new lifetime retirement income solution, designed to enable eligible members to begin building future lifetime income benefits while they are still working. The fund stated the move makes Brighter Super the first member-owned fund to announce the development of this style of product. This arrangement allows eligible members still in the accumulation phase to start building future potential Age Pension benefits, while still enabling choice regarding their super investments.

Australia’s superannuation system has been highly successful in helping people accumulate retirement savings. Despite this success, many Australians remain uncertain about how to convert those savings into a reliable income that lasts throughout retirement. Brighter Super said the solution is designed to help address that challenge by allowing eligible members to begin building future lifetime income benefits during their working years. That strategy offers greater income certainty during those years.

The mechanics of early accumulation

The new initiative will be developed in partnership with TAL, who will provide the lifetime income guarantee underpinning the retirement solution. This partnership reflects a shared commitment to improving retirement outcomes for Australians. TAL provides the guarantee.

“TAL is proud to partner with Brighter Super on this lifetime income solution, because we are passionate about helping more people plan for retirement and enjoy access to savings that can last for life,” Oliver said.

One of the more complex aspects of retirement in Australia involves the interaction between personal savings and government support. The Age Pension functions as a safety net, but its eligibility relies on strict asset and income tests. By starting to build a private income stream while employed, members might alter their asset profile. Such changes can reduce the amount of government support they receive later. However, the upside is that a private income can bridge the gap during times when government benefits are paused for asset testing purposes or simply to provide a buffer. It shifts the focus from a binary choice, a choice between government pension or no pension, to a mixed model that offers more control over finances.

By beginning to accrue these benefits during the accumulation phase, members may be able to increase their overall retirement income. The fund’s modelling suggests members could receive additional income of between $70,000 and $95,000 on average over 25 years of retirement. The numbers are significant, representing a substantial portion of a retiree’s annual expenses.

Timeline and rollout

The solution will be introduced progressively. The fund announced that the accumulation feature is expected to become available to eligible members in the first half of 2027. The guaranteed lifetime income option is scheduled for release in 2028. This phased approach allows the fund to test and refine the mechanics of the product before the full guarantee is offered to the public.

Brighter Super chief executive Kate Farrar said the announcement reflects the fund’s commitment to helping members achieve better retirement outcomes. Farrar noted that Australians have become very good at building super balances, but the next challenge is converting them into confidence.

“The next challenge for our industry is helping people turn those balances into an income that provides confidence throughout retirement,” Farrar said. “Bringing this approach to the member-owned sector is an important step.” Farrar added that the fund is helping members begin preparing while they are still working, rather than waiting until retirement to start thinking about lifetime income. The initiative builds on the fund’s growing retirement offering, which is a priority for supporting members as they move from accumulating super to using it to provide an income in retirement.