Russell advances further into retail investor space

Russell Investment Group has responded to the Government’s recent superannuation changes with a new Private Active Pension that it says is the last of its Private Retirement Series.

The pension product gives investors access to Russell’s multi-manager and single-sector funds, utilising the same fund managers Russell uses for its sizeable global pension fund clients.

Described as a contribution and pension account rolled into one, the product is a response to Russell research showing a demographic shift over the next 30 years when 40 per cent of all retirement savings will be held by individuals aged over 65.

Recognising increasing life expectancy and longer working lives, it wraps a contribution account component around the core pension fund, with investment earnings and contributions taxed at normal superannuation rates and a provision for investors to ultimately combine the two structures without a transaction cost.

Russell’s managing director of retail investor services, Chris Corneil, expects the product to be well-received by financial planners, who he believes have been waiting a long time for retirement products to mirror the simplification of superannuation legislation.

“Russell has been working with advisers, individual investors and employers since legislation changes were announced to develop a product ‘from the ground up’ that truly takes advantage of these changing aspects of retirement.

“We have been inundated with enquiries from Russell’s SuperSolution master trust,” he said.

The product allows for multiple pension accounts under the one umbrella account, with investors paying an investment management fee in lieu of entry, contribution, account-keeping or withdrawal fees.

The Private Active Pension follows Russell’s launch last year of its other Private Retirement Series products, the first of which targeted the self-managed superannuation fund market and the second being a superannuation version of a structured investment fund.