Account Based Pensions
Pension Strategies

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09-Sep-2016

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09-Sep-2016

Making choices about your financial future can be a complicated process. Sometimes it can seem like a course of study is required just to understand your basic options. Read More

Account Based Pensions

What is an Account Based Pension?

An Account Based pension is a pension payable from a member's account from which regular income payments are made following retirement or cessation of employment, or in the case of transition to retirement, whilst still employed from age 55 and over.

A flexible form of investment, an Account Based Pension gives you a regular income. It can also provide key tax advantages.

How does an Account Based Pension work?

Account Based Pensions allow you to determine how large a pension you want each year. The amount is determined by your personal circumstances and how long you want your pension to last. Please note that your pension payments over a financial year are subject to a minimum percentage of your account balance as at 1 July each year. The percentage is based on your age as shown below:

Age at start of
pension or 1 July
From 2013/14
Under 65 4%
65-74 5%
75-79 6%
80-84 7%
85-89 9%
90-95 11%
95 or more 14%

Account Based Pension Advantages

  • Enjoy tax free investment earnings on your account.
  • In most instances tax concessions apply to pension payments to members who are under 60 years of age.
  • Payments to members over the age of 60 are tax-free.
  • Choose the amount of your pension payment (subject to the limits set by legislation).
  • You can make lump sum withdrawals. (If you have reached your preservation age, but have not retired from the workforce, lump sum withdrawals are limited to the amount of any unrestricted non preserved portion of the benefit.) Pension payments are made to your bank account each month.
  • You can choose from the full range of investment options available to Fund members.
  • On death, the residual amount can be paid to your dependants and/or legal personal representative of your estate as a lump sum, or (if permitted) as a pension to a dependant.

Account Based Pensions and Transition to Retirement

Transition to retirement allows you to access all or part of your preserved benefit once you have reached your preservation age, even if you are still employed. A typical example involves choosing to continue working on a part-time basis and using part of your superannuation as an Account Based Pension to supplement your employment income.

While you are receiving a transition to retirement pension, the maximum pension payment that can be made in a financial year is 10% of your account balance at the previous 30 June (or your account balance when you commence the pension).

Please note: If you commence an Account Based Pension when you reach your preservation age, but before you have retired from the workforce, your pension can only be commuted back into a superannuation account.

It is important you seek independent financial advice when deciding whether an Account Based Pension is the right product for you.

Please contact our Client Services Team or download the Product Disclosure Statement and the Pension application form here. This statement also explains the features of the VISSF Account Based Pension.

My Super News

The VISSF app has landed

09-Sep-2016

We want to help you get the most out of your super, so we've developed an app that connects you to your super whenever you want, wherever you are. Read More

You’re not alone

09-Sep-2016

Making choices about your financial future can be a complicated process. Sometimes it can seem like a course of study is required just to understand your basic options. Read More

Please note:

We encourage all VISSF members to register for the new Member Online service (it takes less than a minute) and explore the broader range of features and benefits.


Find out more here.
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