Lutheran Super now offers Account Based Pensions

20/08/2009

Provided by Lutheran Super.


Lutheran Super offers members an Account Based Pension or a Transition to Retirement Income Stream in their pension division.

Account Based Pension Transition to Retirement
Income Streams
Starting a pension You can start an Account Based Pension if you have a super payout that is unrestricted non-preserved (e.g. you are retired). You can use your super to start a Transition to Retirement Income Stream even if you are still working provided you have reached your presevation age.
Minimum Investment An initial investment of at least $50,000 is required. An initial investment of at least $50,000 is required.
Pension Term Your pension does not have a fixed term, it will last as long as you have money in your super account.
Pension Payments You can choose how much you receive each year, subject to the minimum amount set by superannuation law. You can choose how much you receive each year, subject to the minimum and maximum amounts set by the superannuation law.
Frequency of payment Your pension will be paid monthly on the 15th day of each month. You must receive at least one pension payment a year.
Lump sum withdrawals You can make lump sum withdrawals at any time subject to receiving pension payments of at least the minimum amount in a financial year. Lump sum withdrawals can only be made in limited circumstances.
Tax on pension payments You may receive concessional tax treatment


What is a Transition to Retirement Income Stream?

A Transition to Retirement Income Stream is a regular income you can draw from your superannuation once you reach your preservation age (55 if you were born before 1 July 1960), while you continue to work. Significant tax incentives introduced with Better Super have recently made Transition to Retirement Income Streams attractive, particularly to individuals who are age 60 or over. This means you could have the flexibility to work and play when it suits you, without reducing your current income. A Transition to Retirement strategy could also be a tax-effective way to build your super. You could use a Transition to Retirement Income Stream in one of the following ways:

  1. Reduce work hours and maintain your income - You could reduce your employment hours and supplement your reduced salary with income generated from a Transition to Retirement Income Stream.
  2. Increase your income - You could continue working full time and generate income from a Transition to Retirement Income Stream in order to supplement your employment income to meet certain expenses such as paying a debt or improving your lifestyle.


Why you should get personal financial advice

Working out a suitable strategy to get the most benefit out of the pension options can be complex. A licensed, or appropriately authorised, financial adviser will be able to look at your financial situation as a whole and recommend an optimal strategy for you.
Some of the matters to consider with your financial adviser include:

  • Defined benefit super - Do you have a defined benefit component to your super? If so, there are some extra things you need to consider before deciding to invest.
  • Super guarantee / insurance benefits - A salary sacrifice and Transition to Retirement strategy may have an impact on your super guarantee contributions and insurance benefits.
  • Contribution caps - You need to consider the level of salary sacrifice that is optimal in your situation, particularly in relation to the contribution caps that apply to super.
  • Government benefits - Taking out a Transition to Retirement Income Stream could impact on any government benefits you receive.
  • Other income - If you have income from other sources, such as investment income, this may affect the benefit to you of a Transition to Retirement strategy.
  • Amount of pension - How much of your existing super should you transfer to the Transition to Retirement Income Stream and how much income should you receive?
  • Unrestricted non-preserved super - Should you start a Transition to Retirement Income Stream if you have unrestricted non-preserved super?


More information

To find out more about Lutheran Super Pension options, please make use of the following resources:




This information has been prepared by LCA Nominees ABN 61 008 204 939, AFS Licence No. 240571 as Trustee for Lutheran Super ABN 93 371 348 387. This material includes general advice. The general advice had been prepared without taking into account your personal objectives, financial situation or needs. Therefore, before acting on this advice you should consider the appropriateness of the advice having regard to your personal objectives, financial situation and needs. You should also consult a licensed or appropriately authorised financial adviser before making any investment decision. Neither Mercer nor Mercer Investment Nominees Limited take any responsibility for the content or presentation of the material provided by the Trustee.

 

LCA Nominees Pty Ltd ABN 61 008 204 939 AFS Licence #240571, as Trustee for Lutheran Super ABN 93 371 348 387.

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