What is an account-based pension and how does it work?

<!DOCTYPE HTML> <html lang="en"> <head> <meta charset="UTF-8"/> <title>What is an account-based pension and how does it work? </title> <meta name="keywords" content="account-based pension"/> <meta name="description" content="Learn how account-based pensions work, how you can start one, and their benefits. "/> <meta name="template" content="article-page"/> <meta name="viewport" content="width=device-width, initial-scale=1.0"/> <meta name="pageName" content="cfs::personal:retirement:account-based-pension"/> <script defer="defer" type="text/javascript" src="/.rum/@adobe/helix-rum-js@%5E2/dist/rum-standalone.js"></script> <script type="application/ld+json"> { "@context": "https://schema.org", "@graph": [ { "@type": "Article", "headline": "What is an account-based pension and how does it work?", "timeRequired":"8min", "image": "", "author": { "@type": "Person", "name": "" }, "publisher": { "@type": "Organization", "name": "Colonial First State", "logo": { "@type": "ImageObject", "url": "https://www.cfs.com.au/content/dam/cfs-winged/images/CFS-logo.svg" } }, "datePublished": "27 September 2024", "dateModified": "Wed Nov 27 23:29:31 UTC 2024" }, { "@type": "VideoObject", "name": "Retire Smart: Switch to Tax-Free Account-Based Pensions on Vimeo" ,"description": "Marissa Powe and Jackie Clark discuss the advantages and tax implications of switching to account-based pension from your superannuation account." ,"duration": "3:19" ,"contentUrl": "https://player.vimeo.com/video/1008248714" ,"embedUrl": "https://player.vimeo.com/video/1008248714" } , { "@type": "FAQPage", "mainEntity": [{ "@type": "Question", "name": "How do account-based pensions work?", "acceptedAnswer": { "@type": "Answer", "text": "Account-based pensions work by enabling you to receive regular payments from your super savings during retirement. " } },{ "@type": "Question", "name": "Does my account-based pension affect Centrelink payments?", "acceptedAnswer": { "@type": "Answer", "text": "Your account-based pension is considered an asset that generates income, so it could affect your eligibility for Centrelink payments under both the assets and income tests. Services Australia assesses your overall financial situation to determine whether you can receive the Age Pension, and how much. Since your account pension is factored into this assessment, it could impact your Age Pension – but your ability to get the Age Pension will also be affected by any other assets you hold, and other income you earn. " } },{ "@type": "Question", "name": "What is the advantage of an account-based (allocated) pension?", "acceptedAnswer": { "@type": "Answer", "text": "Tax benefits: If you’re 60 or over, you won’t pay tax on your pension payments or your investment earnings. Easy to access: Payments are made straight into your bank account. You can withdraw from your account at any time, and you can withdraw as much as you like until your account balance is exhausted. Flexibility: Choose the payment structure that suits you. This includes how much you’re paid, and how often. Note there’s a minimum you must be paid each year based on your age. Earnings on your investment: As your super stays invested, it can keep growing and might last you a little longer. Structure and certainty: Enjoy regular payments that you can plan around, as though you were earning income from your job. Supplement the Age Pension: Boost your Age Pension income with additional income. Plan for the future: Your nominated beneficiary/ies will receive whatever funds remain in your account when you pass away. " } },{ "@type": "Question", "name": "What is the difference between an allocated pension and an account-based pension?", "acceptedAnswer": { "@type": "Answer", "text": "There’s no difference, they’re effectively the same thing. Allocated pensions were introduced before account-based pensions, but the term “allocated pension” is still widely used despite some considering it outdated. The same rules apply to both. " } },{ "@type": "Question", "name": "Is there any difference between an account-based pension and a term allocated pension?", "acceptedAnswer": { "@type": "Answer", "text": "Term-allocated pensions are less flexible than account-based pensions, but they work in the same way by letting you access your super as a retirement income stream. The main difference is that term-allocated pensions pay over a fixed term – unlike account-based pensions which roll on indefinitely provided there’s still money in your super account. 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aem-Grid--phone--12 "> <div class="headerbanner breadcrumb aem-GridColumn aem-GridColumn--default--12"><div data-cmp-is="headerbanner" class="HeaderBanner HeaderBanner--variant-large-image HeaderBanner--alignment- HeaderBanner--has-image"> <div class="HeaderBanner__Gradient"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12"> <div class="aem-GridColumn aem-GridColumn--xs--12"> <div class="HeaderBanner__Breadcrumb"> <nav id="headerbanner-ec72a9ff8d" class="Breadcrumb Breadcrumb--theme-dark" data-cmp-is="breadcrumb"> <div class="wrapper"> </div> </nav> </div> </div> </div> </div> <div class="HeaderBanner__Container"> <div class="HeaderBanner__Content"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12"> <div class=" aem-GridColumn aem-GridColumn--xs--12 aem-GridColumn--lg--12 "> <div class="HeaderBanner__ContentWrapper"> <div class="HeaderBanner__Heading"> <h1 class="hero2">What is an account-based pension and how does it work?</h1> </div> <div class="HeaderBanner__Meta"> <p class="HeaderBanner__MetaPublishedDate"> 27 September 2024 </p> <p class="HeaderBanner__MetaReadingTime"> 8min </p> </div> <div data-cmp-hook-headerbanner="actions" class="HeaderBanner__Actions"> <a data-tracker-locationid="Join now" href="/join-retirement" data-theme="white" class=" Button Button--theme-white Button--type-solid "> <span class="Button__Label"> Join now </span> </a> </div> </div> </div> </div> </div> </div> <div class="wrapper HeaderBanner__ImageWrapper"> <div class="aem-Grid aem-Grid--12"> <div class="aem-GridColumn aem-GridColumn--xs--12"> <div class="HeaderBanner__Image "> <img class="HeaderBanner__Image__Desktop " src="/content/dam/cfs-winged/images/header-banners/tier2_lighthouse.jpg" alt=""/> <img class="HeaderBanner__Image__Mobile" src="/content/dam/cfs-winged/images/header-banners/tier2_mobile_lighthouse.jpg" alt=""/> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn--tablet--10 aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--12 aem-GridColumn--tablet--none aem-GridColumn aem-GridColumn--default--12 aem-GridColumn--offset--phone--0 aem-GridColumn--offset--default--0 aem-GridColumn--offset--tablet--1"> <div data-cmp-is="container" id="container-d8f70861fb" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-sm container--padding-bottom-lg container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--tablet--10 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--offset--tablet--0 aem-GridColumn--tablet--10 aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--tablet--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="title-56384b1927" class="cmp-title"> <h4 class="cmp-title__text text--center colour-- h4">Account-based pensions, also known as allocated pensions, let you create a regular income stream from your super savings when you retire. They’re flexible and tax-effective, so you get to decide how much you’d like to be paid, and how often. This means you can structure your pension payments to suit your personal retirement goals, and to complement your other income streams. For many Australians, they’re an effective way to smoothly transition into a desirable retirement. </h4> </div> </div> </div> </div> </div> </div> </div> <div class="divider container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="divider-55413ac7bd" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 "> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-c32b98150b" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-lg container--padding-bottom-lg container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="anchorlinks aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div class="AnchorLinks" data-cmp-is="anchorLinks"> <div class="AnchorLinks__Container"> <div class="AnchorLinks__Content"> <h4 class="AnchorLinks__Heading">On this page</h4> <ul class="AnchorLinks__List"> <li class="AnchorLinks__Item"> <a href="#how-do-account-based-pensions-work" class="AnchorLinks__Link">How do account-based pensions work?</a> </li> <li class="AnchorLinks__Item"> <a href="#account-based-pension-minimum" class="AnchorLinks__Link">Account-based pension minimum</a> </li> <li class="AnchorLinks__Item"> <a href="#advantage" class="AnchorLinks__Link">What is the advantage of an account-based (allocated) pension?</a> </li> <li class="AnchorLinks__Item"> <a href="#difference-ap-abp" class="AnchorLinks__Link">What is the difference between an allocated pension and an account-based pension? </a> </li> <li class="AnchorLinks__Item"> <a href="#disadvantages" class="AnchorLinks__Link">Account-based pension disadvantages</a> </li> <li class="AnchorLinks__Item"> <a href="#choosing-the-best-cfs-fund" class="AnchorLinks__Link">Choosing the best CFS fund for your account-based or allocated pension</a> </li> <li class="AnchorLinks__Item"> <a href="#difference-abp-tap" class="AnchorLinks__Link">Is there any difference between an account-based pension and a term allocated pension?</a> </li> <li class="AnchorLinks__Item"> <a href="#centrelink-payments" class="AnchorLinks__Link">Does my account-based pension affect Centrelink payments?</a> </li> <li class="AnchorLinks__Item"> <a href="#after-i-pass-away" class="AnchorLinks__Link">What happens to my account-based pension after I pass away?</a> </li> <li class="AnchorLinks__Item"> <a href="#getting-started" class="AnchorLinks__Link">Getting started</a> </li> </ul> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--6 aem-GridColumn--offset--default--3"> <div data-cmp-is="container" id="divider-9f777ed755" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--6 aem-Grid--default--6 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--6"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-bdc4752027" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-lg container--padding-bottom-lg container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="how-do-account-based-pensions-work" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">How do account-based pensions work?</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-57956f7be8" class="cmp-text"> <p>Account-based pensions work by enabling you to receive regular payments from your super savings during retirement. <br /> </p> <p> </p> <p>The main appeal of account-based pensions is in their flexibility, and the tax benefits – there’s no tax payable on your investment earnings. The payments are also tax-free after the age of 60. </p> <p> </p> <p>You can customise your account-based pension to suit how much you’d like to be paid, and how often. You can choose a fortnightly, monthly, quarterly, half-yearly, or annual payment, as it works for you. </p> <p> </p> <p>You can also choose how you’d like your super invested. And since your money stays invested, it will continue to generate investment returns. </p> <p> </p> <p>Note that there’s a minimum amount you must be paid each financial year from your account-based pension, based on your age. This is called a “minimum drawdown rate”. See the section below for more information. </p> <p> </p> <p>Generally, you can set up an account-based pension when you permanently retire and reach your preservation age, which is based on the year you were born. Use the chart below to learn about the preservation age.</p> </div> </div> <div class="table aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="table" style=" --row-count: 6; --column-count: 2; --column-sizes: 1fr 1fr ; " class=" Table Table--mobileVariation-cellLabel Table--removeLeftInset-off Table--columnTitleStyle-styleThree Table--columnTitleMobileSizeOverride-off Table--columnAlignmentOverride-off Table--columnAlignmentOverrideAll-off Table--columnAlignmentOverrideTwoPlus-off Table--rowAlignmentOverride-off Table--rowAlignmentOverrideAll-off Table--rowAlternateColours-off Table--rowHideMobileRowUnderlines-off Table--rowHideLastRowUnderline-off Table--headingStyle-off "> <div class="Table__Heading h4"> What is my preservation age? </div> <div class="Table__Table" role="table"> <div class="Table__TableHead" role="rowgroup"> <div class="Table__TableRow" role="row"> <div role="columnheader" style="--column: 0" class=" h6 Table__TableColumnHeader Table__TableCell Table__TableCell--columnAlignmentOverride-off ">Your birthday</div> <div role="columnheader" style="--column: 1" class=" h6 Table__TableColumnHeader Table__TableCell Table__TableCell--columnAlignmentOverride-off ">Preservation age</div> </div> </div> <div class="Table__TableBody" role="rowgroup"> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 0; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Your birthday </div> <p>Before 1/7/1960</p> </div> <div role="cell" style=" --column: 1; --row: 0; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Preservation age </div> <p>55</p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 1; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Your birthday </div> <p>1/7/1960 to 30/6/1961</p> </div> <div role="cell" style=" --column: 1; --row: 1; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Preservation age </div> <p>56</p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 2; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Your birthday </div> <p>1/7/1961 to 30/6/1962</p> </div> <div role="cell" style=" --column: 1; --row: 2; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Preservation age </div> <p>57</p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 3; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Your birthday </div> <p>1/7/1962 to 30/6/1963</p> </div> <div role="cell" style=" --column: 1; --row: 3; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Preservation age </div> <p>58</p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 4; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Your birthday </div> <p>1/7/1963 to 30/6/1964</p> </div> <div role="cell" style=" --column: 1; --row: 4; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Preservation age </div> <p>59</p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 5; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Your birthday </div> <p>After 30/6/1964</p> </div> <div role="cell" style=" --column: 1; --row: 5; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Preservation age </div> <p>60</p> </div> </div> </div> </div> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-0b53a0696c" class="cmp-text"> <p>If you want to set up a similar style of super income stream before you fully retire, you can set up a pre-retirement pension, also known as transition to retirement (TTR) pension. TTR pensions allow you to work fewer hours and keep your income topped up with your super savings as you approach retirement. You can start a TTR pension once you’ve reached your preservation age. However, you’ll typically pay more tax on TTR pensions, and face more restrictions, compared to account-based pensions.<b> </b> </p> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-4df9e6eaa1" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--grey-4 "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 "> <div class="imageandtext teaser aem-GridColumn--default--none aem-GridColumn aem-GridColumn--default--10 aem-GridColumn--offset--default--1"><div class="ImageAndText ImageAndText--position-image_left" id="imageandtext-7dd235940d"> <div class="ImageAndText__Container wrapper"> <figure class="ImageAndText__Image"> <img src="/content/dam/cfs-winged/images/object-image/30161-Retirement-Illustrations-0624-v01-FINAL-02222.png"/> </figure> <div class="ImageAndText__Content"> <div class="ImageAndText__ContentInner rte"> <h4 class="h4"></h4> <h2 class="h2">Our guidance consultants are here to help</h2> <div class="p2"><p>Book a free appointment with our call guidance team and take control of your financial future. They can provide general information on retirement, income streams, account-based pensions, and other general questions you may have. </p> </div> <div> </div> <div> <a data-tracker-locationid="Book a free consultation" href="/personal/campaigns/appointment" data-theme="black" class=" Button Button--theme-black Button--type-solid "> <span class="Button__Label"> Book a free consultation </span> </a> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-039c5b56c9" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-lg container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="account-based-pension-minimum" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">Account-based pension minimum</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-13c486473b" class="cmp-text"> <p>There’s a minimum amount you must withdraw from your account-based pension each year. This figure is calculated by the government and is based on your age and your account balance. Have a look at the chart below to understand what your minimum payment might look like. <br /> </p> <p> </p> <p>The minimum drawdown rate for each age group is shown in the table below.  </p> </div> </div> <div class="table aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="table" style=" --row-count: 7; --column-count: 2; --column-sizes: 1fr 1fr ; " class=" Table Table--mobileVariation-cellLabel Table--removeLeftInset-off Table--columnTitleStyle-styleThree Table--columnTitleMobileSizeOverride-off Table--columnAlignmentOverride-off Table--columnAlignmentOverrideAll-off Table--columnAlignmentOverrideTwoPlus-off Table--rowAlignmentOverride-off Table--rowAlignmentOverrideAll-off Table--rowAlternateColours-off Table--rowHideMobileRowUnderlines-off Table--rowHideLastRowUnderline-off Table--headingStyle-off "> <div class="Table__Table" role="table"> <div class="Table__TableHead" role="rowgroup"> <div class="Table__TableRow" role="row"> <div role="columnheader" style="--column: 0" class=" h6 Table__TableColumnHeader Table__TableCell Table__TableCell--columnAlignmentOverride-off ">Age </div> <div role="columnheader" style="--column: 1" class=" h6 Table__TableColumnHeader Table__TableCell Table__TableCell--columnAlignmentOverride-off ">Standard minimum age-based percentage  </div> </div> </div> <div class="Table__TableBody" role="rowgroup"> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 0; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Age  </div> <p>Under 65  </p> </div> <div role="cell" style=" --column: 1; --row: 0; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Standard minimum age-based percentage  </div> <p>4% </p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 1; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Age  </div> <p>65 – 74 </p> </div> <div role="cell" style=" --column: 1; --row: 1; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Standard minimum age-based percentage  </div> <p>5%</p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 2; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Age  </div> <p>75 – 79 </p> </div> <div role="cell" style=" --column: 1; --row: 2; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Standard minimum age-based percentage  </div> <p>6% </p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 3; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Age  </div> <p>80 – 84</p> </div> <div role="cell" style=" --column: 1; --row: 3; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Standard minimum age-based percentage  </div> <p>7%  </p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 4; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Age  </div> <p>85 – 89  </p> </div> <div role="cell" style=" --column: 1; --row: 4; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Standard minimum age-based percentage  </div> <p>9%  </p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 5; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Age  </div> <p>90 – 94  </p> </div> <div role="cell" style=" --column: 1; --row: 5; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Standard minimum age-based percentage  </div> <p>11%  </p> </div> </div> <div role="row" class=" Table__TableRow Table__TableRow--rowAlignmentOverride-off "> <div role="cell" style=" --column: 0; --row: 6; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Age  </div> <p>95+  </p> </div> <div role="cell" style=" --column: 1; --row: 6; " class=" Table__TableCellData Table__TableCell Table__TableCell--columnAlignmentOverride-off "> <div class="h6 Table__TableColumnHeader"> Standard minimum age-based percentage  </div> <p>14%  </p> </div> </div> </div> </div> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-2b92b43214" class="cmp-text"> <p><sub>Note: The table above shows the standard minimum percentages for each financial year.  Age is measured on the commencement day of the pension and every following 1 July.  </sub></p> <p> </p> <p><sub>The government halved the minimums for the following financial years:  2008/09, 2009/10, 2010/11, 2019/20, 2020/21, 2021/22 and 2022/23. The government reduced the minimums by a quarter in 2011/12 and 2012/13.  </sub></p> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-e72da0c5bc" class="cmp-text"> <p> </p> <p> </p> <p>Notably, your account-based pension does not prevent you from withdrawing additional lump-sums from your account if needed. It enables routine and regularity for those who like a predictable and consistent payment schedule, with the flexibility of extra payments. </p> <p> </p> <p>Note that the minimum drawdown rate, changed as of 1 July 2023. Learn more about the <a data-tracker-locationid="cfs | text6-cfsminimumpensionpaymenthere" href="/personal/news-and-updates/latest-from-cfs/minimum-pension-payments">minimum pension payment here</a>. </p> <p> </p> <p>There's also a lifetime limit on how much superannuation you can transfer into a tax-free retirement account like an account-based pension. This is called the transfer balance cap. As of 1 July 2023, the general transfer balance cap increased to $1.9 million. This amount is reviewed each financial year.</p> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="container" id="divider-bed8fb1583" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--8 aem-Grid--default--8 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--8"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-197c4e7622" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="advantage" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">What is the advantage of an account-based (allocated) pension?</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-41d58ab0dc" class="cmp-text"> <ul><li><b>Tax benefits: </b>If you’re 60 or over, you won’t pay tax on your pension payments or your investment earnings. </li><li><b>Easy to access:</b> Payments are made straight into your bank account. You can withdraw from your account at any time, and you can withdraw as much as you like until your account balance is exhausted. </li><li><b>Flexibility: </b>Choose the payment structure that suits you. This includes how much you’re paid, and how often. Note there’s a minimum you must be paid each year based on your age. </li><li><b>Earnings on your investment: </b>As your super stays invested,<b> </b>it can keep growing and might last you a little longer. </li><li><b>Structure and certainty:</b> Enjoy regular payments that you can plan around, as though you were earning income from your job. </li><li><b>Supplement the Age Pension: </b>Boost your Age Pension income with additional income.<b> </b></li><li><b>Plan for the future: </b>Your nominated beneficiary/ies will receive whatever funds remain in your account when you pass away. </li></ul> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn--tablet--10 aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--12 aem-GridColumn--tablet--none aem-GridColumn aem-GridColumn--default--12 aem-GridColumn--offset--phone--0 aem-GridColumn--offset--default--0 aem-GridColumn--offset--tablet--1"> <div data-cmp-is="container" id="container-364ab723fb" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-lg container--padding-bottom-lg container--padding-right-none container--padding-left-none container--row-spacing-none container--gridGutters-off container--mobile-order-0 background--grey-4 "> <div class="aem-Grid aem-Grid--12 aem-Grid--tablet--10 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="text aem-GridColumn--tablet--10 aem-GridColumn--default--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--10 aem-GridColumn--offset--phone--1 aem-GridColumn--offset--default--1"> <div id="text-2153dce19e" class="cmp-text"> <h4 style=" text-align: center; ">Find out how to get more from your super when you retire by avoiding this simple mistake.</h4> </div> </div> <div class="spacer aem-GridColumn--tablet--10 aem-GridColumn--phone--12 aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: 0px; --custom-sm: 0px; --custom-md: 0px; --custom-lg: 0px; --custom-xl: 0px; " class=" Spacer Spacer--type-manual Spacer--preset-lg Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-9 "> </div> </div> <div class="video aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--tablet--6 aem-GridColumn--default--6 aem-GridColumn--offset--default--3 aem-GridColumn--offset--tablet--3"> <div data-cmp-is="video" class=" Video Video--noPadding "> <div class="wrapper"> <div class="Video__Body"> <div class="aem-Grid aem-Grid--12"> <div class=" aem-GridColumn aem-GridColumn--lg--12 aem-GridColumn--xs--12 "> <div class="Video__Object Video__Object--noContent"> <iframe data-cmp-hook-video="video" data-id="1008248714" src="https://player.vimeo.com/video/1008248714?badge=0&autopause=0&player_id=0" allow="autoplay; fullscreen; picture-in-picture" frameborder="0" allowfullscreen> </iframe> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-56db855d62" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-8 "> </div> </div> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="difference-ap-abp" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">What is the difference between an allocated pension and an account-based pension?</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-c33b2f228d" class="cmp-text"> <p>There’s no difference, they’re effectively the same thing. <br /> </p> <p> </p> <p>Allocated pensions were introduced before account-based pensions, but the term “allocated pension” is still widely used despite some considering it outdated. </p> <p> </p> <p>The same rules apply to both. </p> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="container" id="divider-a6d164e5cb" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--8 aem-Grid--default--8 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--8"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-7084fc4585" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="disadvantages" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">Account-based pension disadvantages</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-4a8fe9a714" class="cmp-text"> <ul><li><b>Minimum payment: </b>You must withdraw the minimum amount each year, based on your age and account balance. </li><li><b>Affects Age Pension eligibility: </b>Services Australia factors your account-based pension into your Age Pension income and assets test. </li><li><b>Outliving your super savings: </b>Your <a title="super contributions" data-tracker-locationid="cfs | text1-supersavings" href="https://www.cfs.com.au/super/super-contributions.html">super savings</a> might not last as long as you do. </li><li><b>Investment risk: </b>There’s no guarantee your investment will get positive returns. </li></ul> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="container" id="divider-66a2c4988a" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--8 aem-Grid--default--8 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--8"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-9e73d8ebed" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="choosing-the-best-cfs-fund" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">Choosing the best CFS fund for your account-based or allocated pension</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-7ea5e119f4" class="cmp-text"> <p><a title="join retirement" data-tracker-locationid="cfs | text1-firstchoicewholesalepension" href="https://www.cfs.com.au/join-retirement.html">FirstChoice Wholesale Pension</a> is designed for members and investors who are approaching retirement and want to convert their super benefits into an account-based pension.<br /> </p> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="container" id="divider-d221e6115b" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--8 aem-Grid--default--8 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--8"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-6f6a43d31d" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="difference-abp-tap" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">Is there any difference between an account-based pension and a term allocated pension?</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-503fcb46e1" class="cmp-text"> <p>Term-allocated pensions are less flexible than account-based pensions, but they work in the same way by letting you access your super as a retirement income stream. <br /> </p> <p> </p> <p>The main difference is that term-allocated pensions pay over a fixed term – unlike account-based pensions which roll on indefinitely provided there’s still money in your super account. </p> <p> </p> <p>This means that while your account-based pension can be turned into a lump sum at any time, your term-allocated pension locks you into a fixed payment schedule. </p> <p> </p> <p>One of the main benefits of term-allocated pensions is that only half of their capital value is included in the Services Australia assets test, meaning it might be easier to access payments like the Age Pension. </p> <p> </p> <p>The ability to commence a term allocated pension from existing super savings stopped in March 2007. A term allocated pension can only be commenced today with the proceeds from the commutation of an existing complying income stream. </p> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="container" id="divider-0c6d6712e7" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--8 aem-Grid--default--8 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--8"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-4b6b064811" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="centrelink-payments" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">Does my account-based pension affect Centrelink payments?</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-748cfe57ba" class="cmp-text"> <p>Your account-based pension is considered an asset that generates income, so it could affect your eligibility for Centrelink payments under both the assets and income tests. <br /> </p> <p> </p> <p>Services Australia assesses your overall financial situation to determine whether you can receive the Age Pension, and how much. </p> <p> </p> <p>Since your account pension is factored into this assessment, it could impact your Age Pension – but your ability to get the Age Pension will also be affected by any other assets you hold, and other income you earn. </p> <p> </p> <p>Learn more about <a data-tracker-locationid="cfs | text12-cfsagepensioneligibilityhere" href="/personal/retirement/age-pension-guide">Age Pension eligibility.</a></p> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="container" id="divider-4401ed0a31" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--8 aem-Grid--default--8 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--8"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-2264ee29f2" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-md container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="after-i-pass-away" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">What happens to my account-based pension after I pass away?</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-5c0537fdcd" class="cmp-text"> <p>Your beneficiary, or beneficiaries, will take over whatever funds you have remaining when you pass away. <br /> </p> <p> </p> <p>Your pension can continue to be paid to your spouse, or they can withdraw the balance as a tax-free lump sum. It can also be paid to your other dependants. </p> <p> </p> <p>If your beneficiary is a child, subject to eligibility, they’ll get pension payments until they’re 25, and then receive the remainder as a lump sum. </p> <p> </p> <p>Learn more about <a data-tracker-locationid="cfs | text13-nominatingabeneficiary" href="/retirement/nominate-a-beneficiary">nominating a beneficiary</a> for your super or account-based pension.<br /> </p> </div> </div> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-11 "> </div> </div> <div class="divider container responsivegrid aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div data-cmp-is="container" id="divider-21e3253d24" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--8 aem-Grid--default--8 aem-Grid--phone--10 "> <div class="spacer aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--default--8"> <div data-cmp-is="spacer" style=" --custom-xs: px; --custom-sm: px; --custom-md: px; --custom-lg: px; --custom-xl: px; " class=" Spacer Spacer--type-manual Spacer--preset-md Spacer--direction-vertical Spacer--size-xs-inherit Spacer--size-sm-inherit Spacer--size-md-inherit Spacer--size-lg-inherit Spacer--size-xl-1 "> </div> </div> </div> </div> </div> </div> </div> </div> </div> </div> <div class="container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="container-ec61e09eba" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-md container--padding-bottom-lg container--padding-right-none container--padding-left-none container--row-spacing-xs container--gridGutters-on container--mobile-order-0 background-- "> <div class="margin"> <div class="wrapper"> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 aem-Grid--phone--12 "> <div class="title aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="getting-started" class="cmp-title"> <h3 class="cmp-title__text text--left colour-- h3">Getting started</h3> </div> </div> <div class="text aem-GridColumn--default--none aem-GridColumn--phone--none aem-GridColumn--phone--10 aem-GridColumn aem-GridColumn--offset--phone--1 aem-GridColumn--default--8 aem-GridColumn--offset--default--2"> <div id="text-35e8ea2c73" class="cmp-text"> <p>If you’d like to set yourself up with an account-based pension, you can <a title="join retirement" data-tracker-locationid="cfs | text1-joininminuteswithoursimpledigitalapplication" href="https://www.cfs.com.au/join-retirement.html">join in minutes with our simple digital application</a>. <br /> </p> <p>If you have questions about our account-based pension, or your <a title="retirement planning" data-tracker-locationid="cfs | text1-retirementplan" href="https://www.cfs.com.au/personal/retirement/retirement-income-planning-guide.html">retirement plan</a>, call us on 13 13 36 or book in for a <a title="book an appointment" data-tracker-locationid="cfs | text1-freeconversationwithoneofourguidanceconsultants" href="https://www.cfs.com.au/personal/campaigns/appointment.html">free conversation with one of our guidance consultants.</a><br /> <br /> They can help you understand if you’re on track towards your dream retirement, help you set up retirement income streams, and provide general financial advice.<br /> </p> <p>We can also recommend <a title="Financial advice options" href="https://www.cfs.com.au/personal/tools-resources/advice-options.html">more comprehensive financial advice options</a>, if that’s what you need. </p> </div> </div> </div> </div> </div> </div> </div> <div class="divider container responsivegrid aem-GridColumn aem-GridColumn--default--12"> <div data-cmp-is="container" id="divider-baa32a137a" data-overlap-top="0" data-overlap-bottom="0" class=" container container--padding-top-none container--padding-bottom-none container--padding-right-none container--padding-left-none container--row-spacing-sm container--gridGutters-on container--mobile-order-0 background--blue-6 "> <div class="aem-Grid aem-Grid--12 aem-Grid--default--12 "> <div class="spacer aem-GridColumn aem-GridColumn--default--12"> <div 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href="/etc.clientlibs/cfs-winged/components/content/cardcentre/clientlibs.lc-088b11a9cc7185c85269e411428a1e63-lc.min.css" type="text/css"> <link rel="stylesheet" href="/etc.clientlibs/cfs-winged/common/content/card/clientlibs.lc-a228331d15086b99e0c9b81b0f7cf75f-lc.min.css" type="text/css"> <div data-cmp-is="cardPromo" class=" CardPromo CardPromo--layout-vertical "> <div class="CardPromo__Container verticalLine"> <div class="CardPromo__Image"> <img src="/content/dam/cfs-winged/images/pictograms/static-resized/double-digit-160x120.png" alt="Retirement Planning"/> </div> <div class="CardPromo__Content"> <h3 class="CardPromo__Heading"> <span x-cq-linkchecker="valid"> Retirement Planning </span> </h3> <div class="CardPromo__ContentCopy"><p>Create a strategy for your wealth that helps you retire with financial freedom, security, and purpose. <br /> </p> </div> <div class="CardPromo__Buttons"> <div class="CardPromo__Button"> <a data-tracker-locationid="Read article" 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What is an account-based pension and how does it work?