Transition to retirement
You can still work and receive a pension
A transition to retirement pension can be a great idea if you have reached your retirement age (preservation age) but are still working. It means you can receive regular pension payments from your super.
Here's how it works.
A transition to retirement pension is established by transferring some of your retirement savings from your super account to a pension account. Since you are still working, you need to ensure that your super account remains open after the transfer so you can receive any new contributions from your employer
Then you can choose your payment amounts from the pension account, and how often you receive a payment (at least annually). The payment amounts must fall within annual minimum and maximum amounts set by the Government.
This income can then be used to supplement your income from the employer.
Until the age of 65, you must withdraw:
- at least 4% of the account balance per year
- no more than 10% of the account balance per year.
For example: John Smith is 64 and opening a pension with $150,000. The minimum payment John can receive will be 4% x $150,000 = $6,000 per year. The maximum amount John can take is $15,000 per year (10% x $150,000).
Once aged 65, your transition to retirement pension will convert to an account-based pension.
For the 2010/11 financial year, the Government has halved the minimum payments percentages shown above.
Tax effective
A transition to retirement pension may be highly tax-effective for you.
- No tax payable on investment earnings
- No tax payable on the transferred amount used to commence an account-based pension*
- No tax payable from income received from a pension if you are 60 years and over.
*except where that amount includes an untaxed element, then 15% is deducted from that amount.
Questions?
To learn more about your pension options, visit the SMARTpension website, email memberservices@recruitmentsuper.com.au or call 1300 304 000 and we'll put you in touch with your local Member Services Consultant.
About the Fund
RecruitmentSuper is Australia’s leading industry fund for the recruitment and employment services sector, a range of membership options will help you get the solution you need. Experience the benefits of great value, low–fees and personalised support. With our simple, straight-forward solutions, we’re proud to be known as specialists in the recruitment industry.
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RecruitmentSuper is a division of Professional Associations Super, an industry fund with over 445,000 members across Australia and over $1.5 billion of funds under management. Professional Associations Super divisions include SMARTpension, Australian Enterprise Super, and Accountants Super
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