CSC Retirement Profiles with an annuity

What is an annuity?

An annuity is a secure investment that you buy with part of your super when you meet a condition of release. It reduces your risk of outliving your retirement savings by paying you a monthly income for life.

Income from an annuity is on top of any retirement income stream payments you receive from your CSC account-based pension. It could also reduce your assessable income for Centrelink purposes.

How do Challenger lifetime annuity income payments work

The payment you receive from your annuity is based on the amount of super you use to set up your Challenger lifetime annuity. This income is guaranteed for your lifetime, no matter how long you live or how the investment markets perform.

If you have a spouse, the annuity type that comes with the CSC Retirement Profile you selected will make your spouse a ‘reversionary life insured’. This means if you die, your spouse will receive your annuity payments until their life ends. (The definition of spouse is the same as the definition used in super law.)

Your monthly payments begin one month after you take up the product and, because you’re using your super to invest, your monthly income is tax free. Your regular payments will change every year to align with movements in the CPI.

If you change your mind or die earlier than expected

Challenger lifetime annuities have a withdrawal period and a guaranteed death benefit period that is based on your life expectancy.

Withdrawal periods

If you change your mind, there’s a long period of time during which you can cancel your investment (minus any money you’ve already received) and get your money back.

You should only invest in Challenger Liquid Lifetime if you plan to keep it for life. However, it does have a long withdrawal period based on your life expectancy where you can ask to be repaid a lump sum amount if your circumstances change. Withdrawal periods can range from 26 years if you’re in your 60s, to four years if you’re in your 80s. Your specific withdrawal period is based on your age when you sign up. For example, if you are age 67, male and do not have a partner, your withdrawal period is 18 years.

For more information about withdrawal periods, read the Challenger Lifetime Annuity (Liquid Lifetime) additional information guide.

Guaranteed death benefit period

If you die earlier than expected and you don’t have a reversionary life insured nomination in place, Challenger will pay your beneficiaries or estate a guaranteed death benefit. The death benefit is up to 100% of the amount you invest for a period of time. For example, if you are age 67, male and do not have a partner, a death benefit is payable for the first 18 years.

For the first nine years, the death benefit payable is 100% of the amount invested. After nine years, the death benefit amount equals the maximum voluntary withdrawal amount.

Challenger lifetime annuity terms and conditions

For more information read the Challenger Lifetime Annuity (Liquid Lifetime) PDS, the Challenger Lifetime Annuity (Liquid Lifetime) additional information guide, and the Challenger Target Market Determination.

The annuity included in CSC Retirement Profiles 3, 4 and 6 is called Liquid Lifetime—Flexible Income (Immediate payments).

CSCri and CSC Retirement Profiles are not currently available to ADF customers. CSC is working with relevant Australian Government departments to enable CSC to offer an account-based pension product such as CSCri to our ADF customers where possible. For more information read our CSC retirement income strategy.