MLC Expand has launched the retirement phase of its MLC Retirement Boost income-for-life option as part of the partnership it announced with TAL and Challenger in July last year.
MLC Retirement Boost (Super) was launched in August last year, originally catering for the accumulation phase of a person’s retirement saving and investors can now access MLC Retirement Boost (Pension).
According to MLC, the offering can provide retirees up to 60 per cent more income in retirement through two ‘boosts’.
“What allows it to deliver income for life is, once you’re in pension phase, you receive an additional bonus each year from an insurance partner and that bonus is what makes sure that Retirement Boost continues to pay an income for life, for as long as the customer lives. It’s almost like an account-based pension, with a top up from an insurance partner,” MLC customer innovation director Ashton Jones told selfmanagedsuper.
For the underlying investments, members are able to access the same menu available for superannuation or account-based pensions on MLC Expand, but also get the additional income boost via the insurance partner each year.
The other boost is through the product’s classification as an innovative retirement income stream under superannuation law, which means it receives concessional treatment for Centrelink means test purposes.
“The concessional treatment arises in two parts, one during the savings phase, as they build up their account balance there is a concessional purchase amount calculation that occurs in the background. And what that’s really doing is identifying what component of their account balance will be subject to the asset test at retirement and what component is asset test exempt. And then the second part is, once they choose to take up a pension phase of the solution, there’s a further 40 per cent discount that is provided by the government on the purchase amount,” Jones said.
The earlier a person switches to MLC Retirement Boost (Super) in accumulation phase, the more they can benefit from a social security perspective if they choose to go into MLC Retirement Boost (Pension) upon retirement.
Through the partnership with Challenger and TAL, MLC has also set up a Centre of Excellence for advisers, which provides them with materials and modelling tools to help explain the product and its benefits to clients.
“That’s a new part of our [MLC] Expand experience for advisers that is all about helping them to deliver better quality advice in retirement,” Jones explained.
