With the MTAA Super pension products, you can simply transfer your super into an MTAA Super Transition to Retirement Pension or an MTAA Super Pension.


HOW DOES AN MTAA SUPER PENSION WORK?

Once you reach your ‘preservation age’- which is 55 for people born before 1 July 1960- you are able to transfer your savings into a pension account that is invested by the Fund in the same way as your super. This means you have the choice about where your pension is invested.

A major difference between a super account and a pension account is that any earnings on your pension account are tax free. Once you reach the age of 60 your pension payments and lump sums from your pension are also completely tax free. If you are under 60 your pension payments receive concessional tax treatment.

Once you begin a pension you cannot add to the initial capital with contributions, although you can maintain a super account for contributions (if you are eligible to make them) as long as your account balance is more than $2,000.


ARE YOU OVER 55 AND STILL WORKING?

If you are over 55 and still working, a Transition to Retirement Pension could offer you a very tax-effective income stream from your retirement savings while you continue to contribute to your super account.

These contributions can be Superannuation Guarantee contributions made by your employer, as well as salary sacrifice contributions, which are both taxed at the concessional rate of 15 per cent (within limits). You can also make your own voluntary after-tax contributions. This means you can either reduce the number of hours you are currently working and augment your income with a Transition to Retirement Pension, or step up your retirement savings by salary sacrificing more, which offers tax benefits for your savings.

The Transition to Retirement Pension has restrictions on how much you can withdraw- you can’t take more than 10 per cent of your account balance as payments in any financial year. However, you can cease this pension account and roll it back into your super account at any time. Plus, when you turn 65 or retire from the workforce, your Transition to Retirement Pension converts to an MTAA Super Pension.


THE MTAA SUPER PENSION

Once you have either reached your preservation age and retired from the workforce completely, or reached 65 (even if you are still working), you become eligible for an MTAA Super Pension.

You can choose the frequency and amount of your payments as long as the amount is above the government-set minimum withdrawal. In response to the global financial crisis the government halved the minimum withdrawal amount for the 2009-10 financial year. This drawdown relief has now been extended for 2010-11. You can also take as many lump sums as you like, provided the minimum is $5,000 and at least $10,000 remains in your account. You can even commute (close) your pension account and take it as a lump sum- unlike the Transition to Retirement Pension.

On your death your pension can continue to be paid to a dependant, subject to government- prescribed restrictions, or be paid as a lump sum from your pension account.


PLAN FOR A SMARTER RETIREMENT TODAY

For more information about MTAA Super’s pension products, please visit the MTAA Super website, www.mtaasuper.com.au, or call our Customer Service Centre on 1300 362 415 and ask for a copy of the MTAA Super Pensions Handbook.