• Transition to retirement pensions

  • Receive an additional source of income while you continue working in the lead up to your retirement

    What is a transition to retirement pension?

    As the reality of full-time retirement is increasingly becoming more out of reach for many older Australians, transition to retirement pensions offer people a way to achieve a more gradual entry into retirement when considering working fewer hours or changing careers later in life.

    With a transition to retirement pension you can access your super savings without having to retire from work, while also benefiting from the tax advantages associated with superannuation pensions. This type of account based pension may suit you if you want to:

    • Continuing work as usual, but boost your income with concessionally-taxed pension income from super
    • Work fewer hours, but maintain your lifestyle standard by supplementing lower work income with concessionally-taxed super pension income
    • Salary sacrifice into a super account to reduce your taxable income and grow your super savings.

     

  • Key features

    Australian Catholic Superannuation offers two different transition to retirement account based pensions—RetireChoice and RetireSmart. The following key features apply to these accounts.

    Investments

    You can choose the investment mix that best meets your retirement objectives. Different investment mixes will provide different levels of income and capital growth. You can also change your investment mix at any time. (Not available to RetireSmart members as this pension has a pre-set investment strategy).

    Pension income

    You can nominate your annual income (as a percentage of your account balance), subject to an age-based minimum and a 10% maximum. Unless you wish to become a RetireSmart pension member, you will also be able choose the option/s from which your income is paid.

    Payment frequency

    You can choose to receive weekly, fortnightly, monthly, quarterly, twice-yearly or yearly pension payments.

    Minimum investment

    $25,000 (RetireChoice)  |  $100,000 (RetireSmart)

    Estate
    planning

    Death benefits can be paid to your spouse as continued pension payments, or as a lump sum to your dependants or estate.

    Learn more about our RetireSmart and RetireChoice pension products.

  • How do transition to retirement pensions work?

    • Transition to retirement pensions can provide you with a lot of flexibility depending on your preservation age (at least 56 years based on your date of birth), how much income you earn, your super balance and the amount of tax you currently pay.

      By starting a superannuation pension, such as a transition to retirement pension, the earnings on the pension account are exempt from tax. This means that more money is retained in the pension account for your retirement.

      The taxable component of super benefits paid out from your pension account are eligible for a 15% pension rebate (members under age 60), or are tax-free (members aged 60 or over). If the pension benefit includes a tax-free component, then this portion of the benefit payment is tax-free regardless of your age.

      Rules apply on how much income you can draw from your transition to retirement pension. You can choose an income level between a minimum of 4% and a maximum of 10% of your account balance at the commencement of your pension. Each year, we will advise you of your account balance as at 1 July and you can then adjust your income for the coming year if needed. You must stay within these limits for the financial year (or part remaining from your pension start date). If you started your transition to retirement pension part-way through the financial year, your nominated annual income will be pro-rated for the remainder of the financial year. However, if you nominate the maximum amount, the whole 10% will be paid to you in that financial year.

      Generally, lump sum withdrawals from your transition to retirement pension are not allowed, unless you retire, reach age 65 or satisfy another condition of release. The one exception to this rule is if you have some unrestricted, non-preserved benefits in the pension account. You may have these types of benefits if you were a super fund member before July 1999. If so, these benefits are not preserved and can be accessed as a lump sum from your pension account, without breaking the transition to retirement rules.

      You can change your income or frequency of payments at any time, as long as you remain within the limits applicable for that financial year.

      You can stop your pension account at any time and roll the balance into a superannuation accumulation account or another transition to retirement pension.

      Your transition to retirement pension account must be kept separate from any superannuation account that accepts contributions on your behalf. 

      Learn more about how account based pensions work as well as pension account fees and costs.

  • What does it cost to start a transition to retirement pension?

    • There is no upfront cost to start either a RetireChoice or a RetireSmart transition to retirement pension with Australian Catholic Superannuation, apart from the amount of your minimum initial investment. However, some ongoing fees and costs to administer your pension account and manage your investments will apply. For more information and examples, download the Retirement Product Disclosure Statement (PDF).

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  • Need more information?

    For more detail on Australian Catholic Superannuation's transition to retirement account based pensions, download and read the Transition to retirement account based pension fact sheet (PDF) and the Retirement Product Disclosure Statement (PDF).

    Do you have questions about our pension products or do you require specific advice on your own situation? You could benefit from meeting with a financial planner at Australian Catholic Superannuation. They'll be able to help you decide if a transition to retirement pension is best suited to your financial needs. You can call us on 1300 658 776 for more information or to make an appointment for an initial obligation-free discussion.

    Learn more about our financial advice services.

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