Transition to retirement pension
A non-commutable version of the TasPension, called a Transition to Retirement Pension, is available to Tasplan members wanting to take advantage of the Government’s ‘transition to retirement’ initiatives.
If you have reached your preservation age (see the table below) but do not qualify to start a standard TasPension because you are still working1, you may be able to start a Transition to Retirement Pension.
A Transition to Retirement Pension has the same basic features as the standard TasPension except that your ability to make lump sum withdrawals is restricted.
Also, the payment you receive in any financial year is limited to a maximum of 10% of your account balance at the start of that year, i.e. 1 July, and pro rata for any part year. If necessary, we may make adjustments to your pension payments to ensure that you comply with the prescribed minimum and maximum amounts.
Once you have satisfied a condition of release, your pension will be automatically converted to the standard TasPension.
| If you were born | Your preservation age is |
| Before 1 July 1960 | 55 |
| Between 1 July 1960 and 30 June 1961 | 56 |
| Between 1 July 1961 and 30 June 1962 | 57 |
| Between 1 July 1962 and 30 June 1963 | 58 |
| Between 1 July 1963 and 30 June 1964 | 59 |
| On 1 July 1964 or later | 60 |
Unlike the standard TasPension, a Transition to Retirement Pension cannot be converted to a lump sum and paid to you in cash unless:
- you are cashing an amount that is classified as ‘unrestricted non-preserved’; or
- the law allows you to receive a lump sum benefit, for example, you have retired or reached age 65.
The only other circumstance in which you may convert your Transition to Retirement Pension into a lump sum is if that lump sum is retained in a superannuation fund or used to start another non-commutable income stream.
1 The Government has not specified the minimum or maximum hours you must be working.
| EXAMPLE 1 |
|
Peter is 57 and works 30 hours per week earning $50,000 per annum. He is thinking about retirement, however, he doesn't want to stop work completely. He wants to reduce his hours to 15 a week, which means he will only earn $25,000 per annum. Peter estimates that he and his wife need another $20,000 per annum to meet their lifestyle needs and decides to rollover $200,000 from his super fund to commence an allocated pension drawing the $20,000 per annum that they need. Because the allocated pension income comes with a tax rebate of 15% of the income drawn, they are now paying about $3,000 less tax a year than if he received the income as salary. That extra money could be used to contribute back to superannuation to save for the future – and to qualify for a government co-contribution. Note: this example uses 2008/09 tax rates which may change in the future. |
| EXAMPLE 2 |
|
Sue is 58 and has been made redundant. She wants to work again and is looking for another job. She plans to claim the Newstart allowance while she is looking for work, but it's not enough to fund her lifestyle. Under the old rules she was unable to access her super because she was looking for work and therefore not retired. Under the new rules however she could commence an allocated pension to supplement her Newstart Allowance. When Sue gets a new job and no longer needs the additional income, she could roll the allocated pension back to superannuation until her subsequent retirement in the future. As a Tasplan member, you have access to Free Financial Planning in regard to your Super. Financial planning is about making your hard earned cash work harder for you. Call IFFP on 1300 138 848 for a free consultation. |