Lifecycle products gradually reduce members’ exposure to growth assets as they get older. TelstraSuper is extending the length of time its members are invested in growth assets and introducing an additional aged-based ‘Moderate’ investment option for members between age 65 and 70. 

TelstraSuper Chief Investment Officer, Graeme Miller, said the new, growth-enhanced, product recognised that people were working and living longer and that members could benefit from a longer exposure to growth assets over the course of their super journey.

“Working patterns are not as binary as they used to be. People are not only living longer, but they are also staying in paid work longer or working more flexibly,” said Mr Miller.

Mr Miller said the fund had carefully considered the appropriate risk and return levels for the different age groups, extending the investment time frames by five years for younger and older members.

“50 is the new 45 and 70 is the new 65 when it comes to investing for retirement,” he said.

The changes will see members have their exposure to growth assets reduced at age 50 rather than 45, and then further reduced at age 70 rather than 65. This could add extra money to the retirement balance on an average TelstraSuper member over their working life by the time they reach age 70.

“Younger members who are decades away from retirement have time on their side to ride out periods of market volatility that can come from a higher exposure to growth assets. Importantly, our Growth option is invested across a range of diversified assets, which makes investing super in this option less risky than investing in a single asset class, such as shares,” Mr Miller said.

Equally, it was felt that older members could also benefit from another five years of moderate exposure to growth assets, he said.

“The average 65 year-old today could live for another two or three decades in retirement so a higher exposure to growth is going to help their super last the distance. Importantly, the Moderate option still has an appropriate focus on dampening volatility and preserving capital,” Mr Miller said.

The changes come into effect from 1 October 2023.

Background:

Under the fund’s current lifecycle arrangement, known as TelstraSuper’s MySuper Glidepath, default members are invested in across Growth and Balanced and Conservative investment options, based on their age. Younger members aged up to 45 are invested in the fund’s MySuper Growth option which has a higher exposure to growth assets such as shares; those aged between 45 and 65 are invested in the fund’s MySuper Balanced option; while older default members are invested in a third, Conservative option, which has greater exposure to defensive assets, such as cash and bonds.

Under the new arrangement, which comes into effect from 1 October, 2023, the threshold for transferring younger members out of the MySuper Growth option will be lifted to age 50, while the threshold for transferring members into the fund’s Conservative option will be lifted to age 70. Members aged between 65 and 70 will be invested in the fund’s new Moderate Option, which is more defensive than the fund’s Balanced option, but more growth-orientated than the fund’s Conservative option.

About TelstraSuper: TelstraSuper is an award winning profit-to-member super fund that anyone can join. We support our members to grow and protect their retirement savings with competitive fees, and a leading member experience. Learn more at telstrasuper.com.au