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Highlights

  • AMP Super Lifetime could increase retirement income by more than $100,000 in the first decade by leveraging Centrelink rules.

  • The innovation is likely to work without any changes to investment strategy or added fees.

  • The feature runs automatically in members' super accounts, creating a "concessional" balance that may increase Age Pension entitlements.

AMP (ASX:AMP) has launched a game-changing superannuation feature—AMP Super Lifetime—that promises to help millions of Australians boost their retirement income by more than $100,000 in their first 10 years of retirement. Uniquely, the feature requires no change to how superannuation funds are invested and comes at no additional cost to members.

The innovation, which leverages Centrelink’s concession rules, reduces the amount of super counted in the Age Pension assets test. This means eligible members may qualify for increased Age Pension entitlements, potentially translating into a significant boost in overall retirement income. The younger the member opts into AMP Super Lifetime, the greater the long-term income advantage.

This week, AMP Super Lifetime received Chant West's prestigious Innovation Award. It follows the success of AMP’s award-winning MyNorth Lifetime income solution.

Melinda Howes, AMP's Group Executive for Superannuation & Investments, described the initiative as a breakthrough for the industry and for retirees alike.

“This is a breakthrough innovation for the superannuation industry and, most importantly, our members—a simple, no-cost feature that can significantly increase retirement income and improve access to the Age Pension,” Howes said.
“It’s designed to quietly work in the background, using Government rules to unlock more income when it matters most.”

How AMP Super Lifetime Works:

  • Automatic Activation: Once activated, the feature operates automatically within the member’s super account, establishing a 'concessional' balance that doesn't affect the actual investment or balance of their super.

  • Use of Deeming Rate: This concessional balance is calculated using the Government-set deeming rate, currently 2.25%, instead of the actual return on the super fund. Over time, this leads to a concessional balance that is typically lower than the actual super balance.

  • Age Pension Assessment Advantage: When a member transitions to retirement and opts to move part of their super into an AMP Lifetime Pension, Centrelink uses this lower concessional balance for Age Pension assessment. This may result in higher eligibility for Age Pension payments.

  • Increased Confidence and Income: With greater certainty around their financial situation, many retirees may choose to draw a higher income from their allocated pension, enhancing their lifestyle during the more active early years of retirement.