Overview

ACSuper Pension is commonly referred to as an ‘account based’ pension. You start an ACSuper Pension by rolling over your super money into an account set up in your name. From this account you then draw down a pension in regular instalments.

The money in your account is invested for you. Your account balance will rise and fall depending on:

>        Your investment returns (i.e. the value of your units)
>        Fees and charges deducted
>        Pension amounts paid out
>        Any lump sums paid out

The ACSuper Pension offers many benefits to retirees and people near to retirement:

§         It provides a convenient way to provide regular income during retirement.
     You choose your pension amount (within set limits) and the frequency, and we will pay
     it directly into your bank account – convenient and hassle-free.

§         Your money is managed for you by professionals, saving you time and effort.

§         Your pension is tax-effective. If you are over 60, your pension payments are tax-free.
     Lump sums you withdraw are tax-free, too.  If you are under 60, your pension is subject
     to tax but you can claim a tax-offset of 15%.

§         Your super will continue to generate tax-free returns in your pension account.

§         It is flexible; in fact you don’t even have to be retired to start an ACSuper Pension.
     As long as you’ve reached your preservation age, you can select the Transition to Retirement
     option and enjoy some of the benefits of a permanent retiree. This option can be a very efficient
     way to ease into retirement. You can work part-time and draw down a pension to supplement
     your reduced work income. In this way your lifestyle can be maintained. A Transition to Retirement (TTR)
     pension can be used in tax-effective retirement planning strategies. One way is to include a TTR pension
     in a salary sacrifice strategy to boost your super in the years before you eventually retire fulltime.

§         You can easily keep track of your investment by going online to view information such as your account
     balance, transactions, your investment selection and personal details.

 
Pension payments

You can choose how much you want to receive as your pension but you must take at least an annual minimum payment, which is set by the Government.

If you are taking the Transition to Retirement option, you must also abide by a maximum payment limit equal to 10% of your account balance in each financial year.

You can choose to receive your pension monthly, quarterly or yearly. If you change your mind later, you can advise us to change to a different frequency.

Your pension payment – less any tax – will be deposited directly into your nominated bank account.

Pension payments - minimums and maximums

§         Minimum limit

You can choose how much you wish to receive as your pension payment but it must be more than a minimum pension payment limit each year. This limit is set by the Government and is worked out based on your age and a percentage of your account balance as follows:

The minimum is worked out at the commencement of your ACSuper Pension and then at the start of each financial year. We will advise you by letter at the start of each financial year of your required minimum payment for that year.

To calculate your minimum payment you simply multiply your account balance by the aged-based percentage shown in the table. In the first year, the minimum amount is pro-rated if you joined on a date other than 1 July.

Example:

Jack, age 67, starts an ACSuper Pension on 1 March 2011 and starts with an account balance of $350,000. As he joined during the year, we will calculate his minimum pension payment based on the remaining 122 days to the end of the financial year. His minimum pension payment would be:

($350,000 x 5%) x 122/365 = $5,850 (rounded to nearest $10)

So, if Jack decides to take his pension monthly, he must select a payment amount over $1,463 p/m.

§         Maximum limit

If you take the Transition to Retirement option, you cannot take a pension that exceeds the maximum payment limit. This maximum is equal to 10% of your account balance each financial year. 

Lump sum withdrawals

You can withdraw lump sum amounts from your pension account at anytime. You can draw the entire balance of your account or draw an amount of your choosing. The minimum amount you can take out is $2,000. If you draw the entire balance of your account, your account will be closed. If you draw a partial amount, you must leave at least $5,000 in your account in order to keep it running. We will pay your lump sums directly to your nominated bank account.

Note:

i.                    if you have a Transition to Retirement Pension, by law you are not allowed to withdraw lump sums.
         The only exception to this is if you have amounts in your account classified as unrestricted non-preserved benefits.

ii.                   A withdrawal fee is applicable for lump sum payment

Account balance

When you commence your ACSuper Pension, we will open an account in your name. We will transfer your initial investment from your ACSuper account to this account according to your nomination in your application form. At any given time, the balance of your account is determined by:

§         The amount of your investment
§         Investment returns
§         Pension payments paid out
§         Fees and charges deducted
§         Lump sum amounts withdrawn.

You can check your account balance by logging on as a member at www.acsuper.com.au

Pension payment term

There is no set term in your ACSuper Pension. Once your account runs out, no further payments will be made and your investment will close. There is no guarantee that your ACSuper Pension will last your lifetime.

To get an indication of how long your pension might last, you can go to the online calculator at the Australian Securities and Investment Commission website www.smartmoney.gov.au.

Death benefit

If you die, the balance in your pension account (in this case called the ‘death benefit’) will be paid to your nominated dependants (beneficiaries), who can be the following person/s:

§         Your current spouse
§         Your children
§         Anyone dependent on you
§         An interdependant; that is, someone you have a close relationship with, you live together or receive or
     provide financial support and domestic care
§         Legal personal representative (e.g. an executor or administrator of your estate). 

On your application, you can nominate your beneficiaries in three different ways:

Non-binding nomination – this means the Trustee of the ACSuper fund will pay the death benefit at their discretion to beneficiaries, which may or may not include the person/s nominated by you. The nomination of beneficiaries has no legal binding on the Trustee. In other words, your nomination is considered but final decision on who receives the benefit will rest with the Trustee.

Binding nomination – This means the Trustee is bound to pay the death benefit to the person/s nominated by you or to a legal personal representative, regardless of any changes in your circumstances. The binding nomination lasts for three years, and unless you confirm or amend it during this time it will revert to a non-binding nomination.

Reversionary pension option – This means that if you die, your pension payments will continue and be paid to your nominated dependant (referred to as a reversionary beneficiary and can only be one person). If your reversionary beneficiary dies while still entitled to the payments, the balance of the pension account will be paid to that person’s estate as a lump sum.

Death benefits are taxed differently depending on who receives the benefit and whether it is paid as a lump sum or as a pension.