Australia. Challenger launches floating rate annuity
Challenger is launching a guaranteed floating rate lifetime annuity, with payments linked to the Reserve Bank of Australia (RBA) cash rate.
The new annuity would provide investors with guaranteed payments that moved with the RBA cash rate, allowing them to not miss out when the rate rises again.
Angela Murphy, chief executive of distribution, product and marketing at Challenger, said the option maintained substantial estate and withdrawal benefits, and could improve Age Pension eligibility and outcomes.
“This is a smart new defensive solution for providing income certainty, particularly given current global market volatility and can be combined with other products, such as account-based pensions to build comprehensive retirement solutions,” Murphy said.
“A lifetime annuity is designed to complement other sources of retirement income like an account based pension or the Age Pension, and can be used to fund everyday living costs, providing peace of mind that no matter what investment markets do, an income stream will be paid.”
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