AMP first to launch term allocated pension

AMP today launched the first of what is expected to be a host of fund manager roll-outs of Term Allocated Pension (TAP) products in the lead up to new retirement income streams offerings becoming available as of September 20.

TAPs, also referred to as market linked income streams, allow investment of superannuation savings in growth-style assets much like a traditional allocated pension but also provide certain tax and social security benefits previously only available in a complying annuity.

AMP director of savings and retirement Peter Nicholas says the offering, Flexible Lifetime - Term Pension will align well with the company’s allocated pension offerings.

“It is likely that both types of products will work in unison, with a set income from the market linked pension (offset by asset test concessions) supplemented by the more flexible capital access available from the allocated pension.”

He says AMP would treat amounts invested in both products as one account balance for the purposes of calculating rebates for sums above $100 000.

According to Nicholas there will be no exit fees for those wanting to switch across from an AMP allocated pension to a TAP, but there will be an entry fee which will be determined between the planner and the customer.

The advent of the new type of income stream has prompted AMP to embark on its largest single product education program involving a strict accreditation process that planners must pass before they can offer advice on the new products.

Other companies set to release TAPs before the September deadline include Macquarie (which will launch its new product next Wednesday) BT, ING, Mariner and Colonial.