Australia: First investor takes up 'Transition to Retirement' initiative

A Perth based investor could be the first Australian to take advantage of the Federal Government’s "Transition to Retirement" initiative.

Bruce Stone from Professional Investment Services (PIS) was the first financial adviser to have a client take advantage of the initiative introduced from July this year under a product written on Aviva’s Navigator platform.

According to Tim Cobb, general manager products at Navigator, this is probably a first for the whole of Australia as Navigator was first to provide access to this retirement strategy via its products from 1 July.

The introduction of the "Transition to Retirement" initiative is a milestone in retirement planning as it opens up many different working options for soon to be retirees.

Essentially, investors can work in a part time capacity and still have access to their superannuation savings.

The Western Australian client taking advantage of the initiative is now able to supplement current income with additional income from their superannuation. This gives the client the option to down-scale their work activities without jeopardising their lifestyle because they can still keep contributing into superannuation.

Prior to July, investors aged 55 and over could only access their superannuation when they retired or met some other condition of release.

"This meant people reducing their work hours were seriously downgrading their income but didn’t have access to their superannuation – and this was simply not financially viable," said Tim.

"The government has allowed extra flexibility to help pre-retirees get the most out of their super and its great to see that switched on advisers like Bruce are already using this flexibility to benefit their clients".

Now investors can work part time and supplement their income with a non-commutable pension or annuity, such as an allocated pension or a complying term allocated pension.

Bruce Stone from PIS realised the opportunity the "Transition to Retirement" initiative provided and identified a client who required additional funds to supplement their existing income.

"It was still important for the client to retain some funds in the accumulation phase, as this gives the client the flexibility to still have contributions made on their behalf to their superannuation fund and provide additional income upon full retirement," said Bruce.

"I think this is a fantastic and much needed initiative and there are a lot of investors who will be able to benefit from this new approach. In the past, many people have decided to retire, rather than stay in the workforce part time because they couldn’t afford to cut their income levels in half without access to their superannuation," said Bruce.

"Now we can restructure their investments to allow them a little more work- life balance in the lead up to their full retirement, and I think this is great news for people looking to retire or scale down work in the next few years," he said.

With Navigator, investors can access the "Transition to Retirement" initiative using a complete range of pension products, including:

• Navigator Personal Retirement Plan
• Navigator Super Solutions - Pension (NB: or allocated and growth pension)
• The recently launched Navigator Access.

For further information on the "Transition to Retirement" initiative please see a financial adviser.

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For further information please contact:
Simon Morgan
Group General Manager Public Affairs
Phone: (03) 9829 8892
Mobile: 0407 966 632

Notes to editors:

• Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
• Globally, Aviva Australia is part of Aviva plc, the world’s sixth largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
• Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$78.6 billion, and more than A$645 billion of assets under management (as at 7July 2005). The group has more than 60,000 employees and 30 million customers worldwide.
• The information in this document reflects Navigator Australia Limited's ('Navigator’) understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. Applications to invest in a financial product issued by Navigator, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Navigator or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.