My VicSuper Pension
During periods of investment uncertainty, it can be difficult not to think about the potential impact on the longevity of your retirement savings. In this case, options are available for members which you may like to consider.
This article provides general guidance on these options using scenarios based on whether or not an individual is eligible for the Centrelink Age Pension.
VicSuper’s position and performance
Despite the global financial crisis, VicSuper’s position remains strong and stable, and our performance in 2008/09 compared favourably to other super funds. To read a full summary of last year, view the Chairperson and Chief Executive’s introduction.
I currently receive the Centrelink Age Pension
Members eligible for a part Age Pension under the Assets Test generally receive more Age Pension income as their VicSuper Pension balance is drawn down. Under current arrangements, your Age Pension amount may increase by up to $390 per annum for every $10,000 reduction in asset value. This scenario is set out in the graph below:
As shown, total retirement income each year – which is a mix of Age Pension payments and a regular income stream from a VicSuper Pension – does reduce but not by a significant amount. In this scenario, the member can continue to meet their income needs by making small adjustments to their annual spending habits, while feeling confident that longevity of their retirement savings can be maintained.
For this to happen, the member must elect to receive less income from their VicSuper Pension each year, which increased Age Pension payments may partly offset.
Centrelink is likely to reassess your situation, and may have already increased your payment amount if you’re assessed under the Assets Test and the value of your VicSuper Pension or other investments changed last year.
VicSuper automatically provides member account information to Centrelink in February and August each year.
I may now be eligible for the Centrelink Age Pension
If you’re over age 65 and not previously eligible for the Age Pension, you may now be eligible if the value of your VicSuper Pension or other investments has changed.
If one of these statements refects your current situation, you may be eligible:
Singles:
- The value of my total assets, excluding my own home, doesn’t exceed $626,000 (the cut-off amount is higher if you don’t own your own home).
- My assessable income is below $38,631 per annum.
Couples:
- The value of our total assets, excluding our own home, doesn’t exceed $928,000 (the cut off amount is higher if you don’t own your own home).
- Our combined assessable income is below $59,124 per annum.
To qualify for the Age Pension you must also meet residency requirements.
Assets assessed under the Assets Test include those considered able to earn deemed income such as a bank account, term deposit or share portfolio. Certain assets including your own home are not assessed. These Centrelink requirements are current at 20 September 2009 and are subject to change.
For further details, visit Centrelink’s website or call 13 23 00.
I’m not eligible for the Centrelink Age Pension
If you’re not old enough yet to qualify for the Age Pension, other options to help maintain the longevity of your retirement savings may still be available.
If continuing in some form of paid employment, you may like to consider:
- delaying your full retirement from the workforce, if possible, and
- maintaining, or even increasing, your current level of voluntary contributions into super (but keep in mind the lower contribution limits now in place).
Above all, consider booking a personal super advice appointment with a VicSuper adviser. This service is offered without obligation as part of your membership. It therefore attracts no additional fee. To book an appointment, call VicSuper’s Member Centre on toll free 1300 366 216, or visit VicSuper’s website.