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Guaranteed Income Fund rate reset triggered by low interest rate environment


14/10/2019

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Falling interest rates have resulted in a rates reset for our Guaranteed Income Fund.

Effective Dec.2nd, the guaranteed income fund payments at 65 will change from 5% to 4.2%.*

See table below for full rates adjustment by age.

This change applies those joining the fund after December 2nd. See also our FAQ section for changes to lumpsum withdrawals.

The payout rates for existing customers will not be affected with respect to current balances. However, any additional deposits made after Dec. 2nd will be priced at the new rates as set out below if you have begun taking withdrawals. If you haven't begun taking any income, then any additional lumpsum deposits made post-Dec.2nd will be priced in accordance with the old rate structure.

The table below shows the new rates which vary according to age depending on when you elect to start taking your income payments. The rate does not adjust annually thereafter. You can stay in the fund as long as you like and start the guaranteed income when you choose after age 65.

If a portion of your GIF comes from an Australian superannuation fund transfer then you may be able to set a portion of your guaranteed income from age 60. 

Remember that the income is paid from your capital and your returns and is after tax and fees. It's also distributed on the same day as the NZ Superannuation.

Concurrent to the reset, the insurance premium will be lowered from 1.3% to 1.25%. Simplicity's total fund charge is 0.31% plus $30 a year. 

New changes in income payment by age.* 

Please note rates have been adjusted from Nov.29th from 4.5% to 4.2% and with adjustment on age as per below. 

 

Age

Old Rate

New Rate

65

5.0%

4.2%

66

5.1%

4.3%

67

5.2%

4.4%

68

5.3%

4.5%

69

5.4%

4.6%

70

5.5%

4.7%

71

5.6%

4.8%

72

5.7%

4.9%

73

5.8%

5.0%

74

5.9%

5.1%

75

6.0%

5.2%

76

6.1%

5.5%

77

6.2%

5.8%

78

6.3%

6.1%

79

6.4%

6.4%

80

6.5%

6.7%

81

6.6%

7.0%

82

6.7%

7.3%

83

6.8%

7.6%

84

6.9%

7.9%

85

7.0%

8.2%

86

7.1%

8.6%

87

7.2%

9.0%

88

7.3%

9.4%

89

7.4%

9.8%

90

7.5%

10.2%

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