Aware Super expands Challenger partnership for lifetime income solution

Aware Super has moved to expand its retirement income offering through a partnership with annuity provider Challenger, as superannuation funds face growing pressure to help members turn accumulated savings into sustainable income.

The $250 billion fund has signed an agreement with Challenger to develop a lifetime income solution for its more than 1.3 million members, building on an existing relationship between the two organisations.

The proposed product is intended to provide members with greater certainty that their retirement income will last throughout their lifetime, while retaining flexibility and choice over how they access their savings.

Aware Super chief executive Deanne Stewart said the partnership would strengthen the fund's range of retirement options, particularly for members seeking protection against the risk of outliving their savings.

"A lifetime income solution will play a key role in Aware Super's broader range of retirement solutions, providing greater income confidence and longevity protection for those members who place higher value on these features," Stewart said.

She added that the product would be supported by the fund's advice and guidance services to help members make decisions suited to their individual circumstances.

Challenger manging director and chief executive Nick Hamilton said the partnership would combine the insurer's retirement income and longevity expertise with Aware Super's digital capabilities and scale.

"The real test of a retirement solution is whether it gives people confidence to use the savings they've spent a lifetime building, knowing they have income they can depend on," Hamilton said.

He said Aware Super had a significant opportunity to help its large cohort of members approaching retirement convert accumulated savings into income that would last for life.

The agreement also supports Aware Super's obligations under the federal government's Retirement Income Covenant, which requires trustees to develop strategies to help members manage their retirement income.

"We're combining Challenger's retirement income and longevity expertise with Aware Super's leading digital ecosystem and proven track record of delivering innovative solutions at scale," Hamilton said.

The partnership builds on an established relationship between the two groups. In 2023, Challenger provided a $619 million group lifetime annuity policy to Aware Super to reduce investment, inflation and longevity risks associated with defined benefit pension liabilities for about 3000 members.