Aware Super selects Challenger for defined benefit solution

Oksana Patron

27 July 2023

Challenger has announced it has been selected as Aware Super partner to provide a de-risking solution for their defined benefit fund.

Under the terms of the deal, Challenger will provide a group lifetime annuity policy to the value of $619 million that will de-risk the fund’s lifetime pension liabilities from investment, inflation and longevity risk.

The policy will commence from 31 July 2023 and cover approximately 3,000 members.

In the announcement made to the Australian Securities Exchange (ASX), Challenger said that the defined benefit pension market presented a significant opportunity, with an increasing number of corporate pension plans and superannuation funds looking to de-risk their defined benefit liabilities.

Challenger’s managing director and chief executive, Nick Hamilton, said that the transaction would further reinforce the breadth of retirement income needs Challenger supported across the superannuation industry.

“With the Australian savings market now very focused on retirement, the opportunity for Challenger to support the industry with guaranteed income solutions, managed and regulated in Australia, is significant,” he said in the statement.