How It Works

Step1 Lifestyle Retirement Bands (LRB’s)

LRBs are dollar based bands of retirement balances. Trustees set the LRBs, through the TTS Application. Investment strategies can then be tailored to each defined band to better match the return and risk needs of each group of members with a projected retirement balance that falls within that LRB.

Step 2 Glide Paths

Glide Paths are a range of investment options over time, typically shifting from growth to defensive assets as member’s age. One Glide Path is set  per LRB based on the retirement lifestyle outcome, Age Pension, Tax and other characteristics for that LRB.

Example: Glide Paths per Lifestyle Retirement Band

TTS Glide Paths

Step 3 Members are placed into their LRB and onto their Glide Path

Then, each year members are advised on their annual statement of their LRB and investment option plus the switching date (if applicable). This step is a similar automatic process as that used for Age Only Life-cycling.

Annual Re-calibration Process

TTS is not a static application.  It automatically recognises the dynamic nature of changing member circumstances over time (e.g. increases in income, voluntary contributions, extended period of leave, etc.) – normally aligned on a yearly basis to the 30 June statement process.

Step 1: Trustee sets Lifestyle Retirement Bands (LRBS).

LRB1 may be all MySuper members with projected retirement balances under $100,000, regardless of age. LRB2 $100,000 – $200,000 and so forth.

Step 2: Trustee sets a Glide Path for each LRB.

A member in LRB1 may have a Glide Path that reduces from 100% equities to 90% around age 30 and then to 70% at age 55. LRB2 will have a different glidepath.

Step 3: Trustees use projected retirement balances to place members into their LRB and onto their Glide Path.

Members’ Projected Retirement Balances are estimated using existing database information, as recommended to be placed on annual statements by the FSI.

This results in an investment option selection tailored to each member.

Members are then advised in writing and their account balance moved usually some months later.

Typically members have an opportunity and time to choose another investment option – however if no selection is made (and these are largely disengaged individuals) the funds are automatically transferred to the new investment option – that is it is an opt out rather than opt in process.