Self Managed Allocated Pensions

Allocated pensions are the most popular way to receive superannuation benefits in retirement. Their popularity can be attributed to their particular tax efficiency and income flexibility.

In simple terms, an allocated pension is an income stream paid to a member that is funded out of the member’s superannuation account, into which investment earnings are credited. It is not unlike a passbook savings account, except that investment earnings and capital gains are tax exempt. The pension continues for as long as the member has a credit balance in their account or until the member dies, in which case any remaining balance is paid to a nominated beneficiary. Each year, the member must choose within the legislative minimum and maximum, the amount of the pension for that year. The member can stop the pension at any time to take all or part of any remaining balance as a lump sum eligible termination payment.

Allocated pensions can only be paid by a superannuation fund.

To commence an allocated pension one must be necessarily eligible to receive their superannuation benefits - normal preservation rules apply.

Therefore, to access ones benefits one would need to:

• turn age 55 AND permanently retire, intending never to work either on a part-time equivalent or full-time basis; or,
• turn age 60 and cease existing employment arrangements; or,
• turn age 65; or,
• become totally or permanently disabled; or
• die.

Unrestricted Benefits are benefits not subject to preservation rules and can, therefore, be accessed at any time. A person may start an allocated pension with their unrestricted benefits at any time.

Should you wish to commence receiving your benefits in the form of an allocated pension, we will:

• Determine your eligibility to receive such a payment;
• Calculate the benefits that are available to be taken as an allocated pension;
• Assist you in determining the Components used to pay the pension;
• Calculate your first and subsequent year Minima and Maxima;
• Calculate your first and subsequent year Deductible Amounts;
• Calculate yearly rebatable amounts;
• Notify the Reasonable Benefit Limit Unit of the ATO;
• Assist with Centrelink enquiries, if necessary;
• Prepare Trustee Minutes;
• Prepare member payment request documents;
• Register the Fund for PAYG Withholding;
• Prepare and issue yearly PAYG Payment Statements and Summaries;
• Arrange, while still required, actuarial certificates;
• Ensure that payments are made on either a monthly, quarterly, yearly or as needs basis; and
• Withhold tax to be deducted from the pension payments and forward to the ATO when due.

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