CPIplus 

CPIplus' target return objective is designed to increase the consistency of investment returns while continuing to maintain the simplicity, flexibility, and liquidity of an account-based pension.

By offering a return above CPI, the CPIplus option is designed to generate returns that exceed the level of inflation (as measured by CPI), hence minimising the impact of inflation on the real value of your investment returns.

Over the long term, the CPIplus option is designed to provide returns that are more certain and less volatile than those typically available by investing in growth assets, like shares, while offering generally higher returns than those available by investing in conservative assets, like cash.

Returns are credited each business day through the increase in the investment options unit price.

CPIplus’ assets are invested in the same pool as our Balanced (Pension phase) option. The assets of the Balanced option in the accumulation and TTR phases are also invested in the same pool.  

As CPIplus’ return is set in advance, its returns formula is not affected by the performance of the underlying investments. Instead, the Balanced option in the accumulation phase receives any excess market returns generated by CPIplus assets. The Balanced option in the accumulation phase will also make up any shortfall if the CPIplus investment returns do not reach the predetermined return.  

CPIplus returns are not guaranteed. However, Hostplus will review the predetermined rate for ‘n’ annually and expect that over the long term, a value of ‘n’ between 2% to 3% should be achievable.  Additionally, CPIplus has a return ‘floor’ of zero, which means that members will not receive a negative return, for any Return Period. 

As with all investments, there are risks that you should consider before you decide to invest. As outlined in the Pension Guide (Product Disclosure Statement), these are:

• As the predetermined return formula (including ‘n’) is only set for the defined Return Period (usually 12 months from 1 July), the predetermined rate ‘n’, other aspects of the predetermined return formula, or terms of operation of CPIplus such as formula methodology, product rules, etc. may change in future Return Periods. Although Hostplus does not expect any significant variation in the value of 'n' in the long term, Hostplus has discretion to set the value of 'n' to be higher, lower, or negative for future return periods.
• While Hostplus expects to offer CPIplus to its pension members on an ongoing basis over the long term, Hostplus reserves the right and could determine to not offer CPIplus in the future.  
• Although the determination of ‘n’ is scheduled to occur annually, Hostplus reserves the right to shorten the Return Period or discontinue offering the predetermined rate. Hostplus may conduct an interim investment strategy review if a ‘risk trigger event’ occurs.  

A risk trigger event is defined as a severe event that results in a significant risk to the implementation of the investment strategy for the CPIplus option or the Balanced option. As an example, Hostplus conducted an interim investment strategy review in 2020 because it considered the sudden and significant changes in the external environment due to the onset and impact of COVID-19 and government policy settings, to qualify as a risk trigger event. 

Hostplus reserves the right to bring forward the end of a Return Period or terminate the CPIplus option byproviding members in CPIplus 30 days’ notice in the case of changes resulting from a risk trigger event or 90 days’ notice in all other cases.

To view the historical returns for CPIplus, visit our investment returns page. 

You can find the current CPI rate applicable to CPIplus, the current value of ‘n’ and the Return Period in our CPI Rates document.

Hostplus will review the predetermined rate for 'n' annually and expects that over the long term, a value of 'n' between 2% to 3% should be achievable. Hostplus does not anticipate significant variation in the value of 'n'.

Hostplus reserves the right to make changes to ‘n’ more frequently – please refer to the ‘Are there any risks involved in CPIplus?’ question above for further details.  

You can switch in and out of CPIplus at any time through Pension Online. You can also:

• Have your regular pension payments deducted from CPIplus
• Have lump sum withdrawals deducted from CPIplus

You can invest your entire Hostplus Pension account balance in CPIplus. 

An investment minimum of 1% of your Hostplus Pension account balance applies.