REI Super has launched a retirement income product designed to avoid a repeat of super fund performance during the global financial crisis (GFC) and draw member funds out of cash.
REI Super chief executive Mal Smith said until now some members had responded to GFC super losses by moving their money into its cash option which may have been suitable short-time but would be a real drag on returns in the medium and long term.
""We know that our members need long term growth to ensure their retirement savings last longer," he said.
"For those members approaching retirement, they can less afford to be impacted by market volatility, which generally goes hand in hand with investment in growth assets."
The investment option aims to achieve returns of CPI+1. It blends growth assets, particularly Australian and international equities for the return potential with a high allocation to defensive assets like bonds ensuring a regular income stream.
"It is an option that will be managed very actively, meaning the actual asset allocation will move across a broad range, according to the prevailing and future economic and market conditions," Smith said.
According to the Association of Superannuation Funds of Australia (ASFA), the GFC produced two of the largest negative annual investment returns in the last 40 years. Super funds posted a negative return of 8 per cent in 2007-08 and negative 12.9 per cent in 2008-09.