The $6.2 billion superannuation fund Media Super has issued a notice to members notifying them that its Income Plus investment option will close effective 5 February 2019.
The fund said the ongoing low bond yield environment has put performance of its income option at risk - enough so that Media Super has elected to wind it up.
Income Plus is actually a white-labelled Mercer product. Mercer is winding up the option so funds that use it will have to as well.
"We regularly review all our investment options to ensure members have access to market-leading products and that all our options best serve our members' needs," Media Super said in a statement.
"With this in mind, we believe that closing the Income Plus option is in the best interests of members, as while the option has performed strongly, the ongoing low bond yield market environment will continue to impact the distributable income and we anticipate the option's scale benefits will be reduced in the future."
Rainmaker analysis indicates the Media Super Income Plus option stood at just over $2 million at the end of September this year.
Performance after investment and administration fees on 30 September 2019 was FYTD 1.83%, one-year performance 6.19% and three-year performance 5.45%.
Members of the industry super fund will have to select an alternate investment option but will have the switching fee refunded for the transaction.
Media Super has advised members that the Stable option has a similar risk/return profile to that of Income Plus.
If members do not switch their Income Plus balance to a different option by the end of January next year they will be defaulted into the balanced MySuper option.
Pension members will have to notify Media Super of the allocation of their investment options to be drawn down as part of pension payments. If they do not specify the allocation to drawdown, their pension payments will be drawn down proportionally which will override any allocation they currently have in place.
Media Super said Income Plus will continue to be managed and monitored according to the current investment objectives and strategy.