Allocated Pensions invest eligible superannuation to pay you an
ongoing amount each year, within Government prescribed
minimum and maximum levels until the total balance is
Allocated Pensions are designed to make retirement income as tax and social security
effective as possible.
HOW DO THEY WORK?
You continue receiving your income payments until:
your capital runs out; or
you withdraw all of your capital.
If you die any money left in your allocated pension account is either paid to your spouse
or estate, or your spouse may continue to receive the pension payments. In some cases
the balance or the pension payment may be paid to another beneficiary.
There are a number of strategies to help ensure your capital lasts as long as possible.
Your financial planner can advise you as to the best way to structure your investments to
Before you invest, you will need to select the amount of income you want to receive from
You can receive your income payments monthly, quarterly, half-yearly or annually.
Payments can be deposited directly into your bank, building society or credit union
account. All investment earnings are automatically added to your account balance.
The level of income that you select must fall within certain minimum and maximum
limits, which are set by the government. The limits depend on your age and your account
balance in the Allocated Pension.
We suggest that you discuss income payments with your planner, who will take into
account your household budget, social security entitlements, income tax and all other
aspects of your plan.
Allocated Pensions have many benefits for retirees:
you receive a regular tax-effective income;
you may receive social security concessions;
you select the level of income you require (within prescribed limits);
you can change the income level each year (within the prescribed limits);
you have the certainty of knowing your account balance at any time;
generally you can access your capital at any time;
you choose whether your allocated pension is adjusted in line with inflation;
your account balance may be passed on to your beneficiaries if you die (unlike some
A major advantage of Allocated Pensions is that they offer you a broad choice of
investment strategies. Typically, you can diversify your investment in an Allocated
Pension over a wide selection of asset classes, including cash, fixed interest, property
Australian shares and international shares.
WHAT IF YOU DON’T HAVE SUPERANNUATION?
As Allocated Pensions can only be purchased using proceeds from a superannuation fund.
Those without a superannuation fund may consider purchasing an annuity. An annuity
provides you with regular income payments. These differ from Allocated Pensions
particularly for investment choice and how income and earnings of your investment are
Your financial planner can provide you with further information on Allocated Pensions,
annuities and other retirement options.