Surprising ways lifetime income products are market linked

Market Linking, also known as “Investment Linking”, is a product feature where the account balance of lifetime income products is invested partly or fully in investment options provided by the product provider.

Five of the six of current providers of lifetime income products employ market linking as a product feature, however the ways that this is provided differ substantially.

Allianz

Market linking is standard to Allianz’ AGILE product. Investment option selection differs in the Growth (or Deferment) Phase when funds are being accumulated, to the Income Phase when income is being paid:

• Growth Phase: Four options are available: Australian Equity Index, either with full protection against market loss in each year, or protection from the 1st 10% of market loss in each year, Global Equity Index, either with full protection against market loss in each year, or protection from the 1st 10% of market loss in each year.

• Income Phase: Only one option is available: Australian Equity Index with full protection against market loss in each year.

AMP

Market linking is the standard approach in AMP’s MyNorth Lifetime product. This is available in two ways:

• Select: a range of active and index funds, diversified multi-manager investment options offering access to specialist fund managers in each asset class, term deposits and a selected range of managed portfolios.

• Choice: an extensive list of multi-manager & single manager funds, managed portfolios, listed securities on the S&P/ASX 300 & selected Australian real estate investment trusts (AREITs), exchange traded funds (ETFs), exchange traded commodities, listed investment companies & listed investment trusts.

ART

Market linking is the standard approach for ART’s Lifetime Pension and is available through the Balanced Risk-Adjusted investment option.

Challenger

Market linking is available in four Liquid Lifetime Market Linked products (Superannuation with and without death and exit benefits, Non superannuation with and without death and exit benefits).

Five investment options are available: Cash, Conservative, Conservative Balanced, Balanced and Growth.

Apart from market-linking Challenger also offers Liquid Lifetime products with level income and income linked to CPI and the RBA Cash Rate.

Generation

Market linking is the standard approach in Generation’s Lifeincome product with 29 investment options available:

• Index: Australian fixed interest, Australian shares, International shares (hedged and unhedged), Australian property; Diversified – conservative (2), balanced (2), growth (2), high growth and real return (3).

• Cash & Deposits

• Single sector: fixed interest diversified, fixed interest international, Australian shares (3), International shares (3), property infrastructure; Private Debt; ESG – international fixed interest, diversified growth and international shares.

UniSuper

UniSuper does not offer market linking in its Lifetime Pension product, only linking to increases in CPI being available.