How CPIplus can help when markets are going up and down

An account-based pension, like a Hostplus Pension account, turns your super into a regular tax-free income. It lets you withdraw money as you need it, while keeping the rest invested so your balance keeps growing. But while this gives you flexibility, it can be unsettling when the investment markets go up and down, particularly when you rely on your pension income.

That’s why we created CPIplus, an investment option which can be used by Hostplus Pension members as part of their broader investment strategy. It’s a low-risk option designed to reduce uncertainty and provide a more stable return.

Unlike other investments that move with the markets, CPIplus offers a return set above inflation each financial year. The return is made up of two parts:

• a variable return based on the average of inflation (measured by the consumer price index - or CPI) over the previous two quarters 
  
  PLUS
• a fixed return determined by Hostplus annually – typically applied for 12 months (currently 2.5%).¹

While the variable CPI return may change throughout the year, CPIplus includes another safeguard: a zero-return floor. For instance, if inflation is negative, your return will not be negative, ensuring you don't lose money. This added certainty can help you feel more confident about your retirement income. 

CPIplus can be used on its own, or combined with other Hostplus investment options to help balance stability and growth over the long term.

You retain the ability to adjust your investment strategy if your needs change.

During a market downturn, the portion of your pension invested in CPIplus remains stable, providing you with a consistent income while other investments may fluctuate. This helps maintain the stability of your retirement income, protecting your overall balance and giving you peace of mind.