VicSuper Non-Commutable Pension
A non-commutable pension is an income stream that allows you to receive pension payments from your super benefits without having to retire from the workforce. A non-commutable pension can be commenced with preserved super benefits, however, access to your money is restricted as you are generally unable to make lump sum withdrawals until you meet a condition of release (such as permanently retiring from the workforce or reaching age 65).
Who may want to consider a VicSuper Non-Commutable Pension?
There are two groups of people over age 55 who may like to consider a non-commutable pension:
- Those who would like to reduce their working hours while supplementing their salary with pension payments from their super lump sum.
- Those who wish to use it as part of a strategy to increase their super balance without lowering their standard of living.
If you would like to see a VicSuper superannuation adviser to discuss your options, at no charge and without obligation, please call our Member Centre on 1300 366 216.
At a glance
Type of benefit plan
Transition to retirement account-based pension
Who can join?
Anyone who has reached their preservation age and has access to a superannuation benefit of at least $10,000.
VicSuper provides a range of benefits and services for a low fee structure. There are no fees charged on entry or exit, to make contributions, to roll over or withdraw funds, or to change investment options. For more information on VicSuper's fee structure and other costs affecting your super see Fee structure.
You can roll over your preserved, restricted non-preserved and/or unrestricted non-preserved super money from VicSuper Fund or other complying superannuation funds to start your non-commutable pension.
Once your pension starts you cannot make contributions into your account, so you may like to consider combining all your superannuation benefits at the outset, for example using VicSuper Beneficiary Account. If, after you open your account, you have other superannuation funds from which you want to draw a pension, you can open a second VicSuper Pension account (as long as the starting amount is at least $10,000).
Choose twice monthly, monthly, quarterly, half-yearly or yearly income payments, paid into a financial institution of your choice. Choose to receive payments on either the 15th day and/or the last business day of each month; and choose to receive the minimum pension payment amount prescribed by the Government.
Partial withdrawals or 'commutations'
None, except in limited circumstances. However, once you meet a condition of release (such as retiring from the workforce or reaching age 65) your pension reverts to a VicSuper Commutable Pension. You can then make lump sum withdrawals at any time (excluding funds invested in the Term Deposit Option).
There is a minimum annual payment amount based on your age and a maximum annual payment amount of no more than 10% of your account balance. Use VicSuper's calculator to find out how much you can receive from a VicSuper Commutable Pension as well as how long it may last.
Age 60 and over
Tax-free pension payments and lump sum withdrawals.
Under age 60
Lump sum withdrawals: will be taxed based on your tax components.
Pension payments: will have PAYG tax applied to the taxable component.
|Assets Test||100% assessed under the Assets Test.|
|Income Test||Assessed against the Income Test, however Centrelink will apply a deductible amount.|
Choose one investment option or a mix of options from VicSuper's seven investment options. If you do not choose an investment option, or mix of options, when you join, your account will be invested in the Growth Option (VicSuper's default option).
Nominate a representative
You can nominate a representative (eg your spouse) to make enquiries or obtain information about your account such as your contact details, payment amounts and your account balance. Your representative cannot change your account details.
|Death benefit nominations|
You can choose what happens to your superannuation benefit by making a death benefit nomination.
How do I join?
To open a VicSuper Non-Commutable Pension:
- Read the VicSuper Pensions Combined FSG and PDS, including the section on privacy.
As the joining process can be quite detailed, we encourage you to visit us. Call VicSuper's Member Centre on 1300 366 216 or use our online request form to make an appointment to see one of our superannuation advisers. Our superannuation advice service is offered without obligation and at no charge.
During this meeting we can:
- tell you about the pension options available to you
- guide you through the joining process and help you complete the relevant forms
- advise you on how to combine all your superannuation benefits before you start a VicSuper Pension
- help you structure your account and choose the right investment strategy to suit your needs.
For more information on VicSuper Non-Commutable Pension please refer to the VicSuper Pensions Combined FSG and PDS. You can download a copy from Publications.
If you would like a copy sent to you, complete our online request form or call our Member Centre on 1300 366 216.