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Your retirement income is likely to come from a range of areas, and will usually consist of:

  • Centrelink Age Pension – this is a great base for most people to build the rest of their retirement income from
  • Superannuation savings – this can be a very tax efficient way of receiving an income in retirement
  • Other sources – such as investments, savings held outside your super or some form of paid work (if you are transitioning into retirement) 

Regardless of where it comes from, the most important thing to consider is whether you will have enough to provide you with the income you want for the rest of your life.


  • Transition to retirement (TTR)

    A transition to retirement strategy may be suitable for people who are eligible to access their super and want to cut back their working hours, but not retire completely. It can be a great way to supplement your income while you wind back gradually to explore new interests and ease into retirement.

    Alternatively it can be used to accelerate your super savings while you continue to work when used in conjunction with salary sacrifice contributions.


    A transition to retirement income, such as VicSuper Flexible Income with Transition to Retirement feature, can offer great financial and tax benefits.

    Features to note include:  

    • Investment earnings on Flexible Income accounts with a TTR feature will be taxed until you reach age 65 or notify VicSuper that you satisfy a relevant condition of release.

    • A 'transfer balance' cap applies to the amount of super you can transfer into your retirement account/s without incurring additional tax. For the 2018/19 financial year, this amount is $1.6 million. This does not apply to transfers into accounts with the TTR feature but applies once the TTR feature is no longer applicable, for example, on retirement.

    Refer to the Flexible Income PDS (PDF) for details of these changes.

    If you are considering investing in a Flexible Income account with the TTR feature (or are already invested in one), we recommend you call our Member Centre or talk to a VicSuper financial planner to find out how these changes could impact your retirement plans. 

     

    Benefits of a transition to retirement strategy

    • Boost your super savings through extra salary sacrifice contributions while maintaining your take home income.
    • Alternatively, cut back your working hours but not your take-home pay.
    • You can earn tax-free income from your retirement income if you're aged 60 or over.

     

    Is it right for me?

    This strategy must be tailored to an individual's circumstances, so it's important you get expert advice from a qualified VicSuper financial planner.

    However, as a guide it may be best suited to those who:

    • have a taxable income in excess of $19,400 pa and have a marginal tax rate of 19% or more
    • want to reduce their working hours but maintain their standard of living; or
    • want to continue working full-time and boost their super before retirement without affecting their take home pay.

     

    How can I do this through VicSuper?

    VicSuper Flexible Income with Transition to Retirement feature is designed specifically for people who want to transition to retirement.

    You can receive up to 10% of your super savings per year as a regular income stream while you continue to work.

     

    At a glance

    VicSuper Flexible Income with Transition to Retirement feature

    A transition strategy suitable for people who are currently age 55 or over and still working, but want to supplement their income from their super savings

    Minimum investment

    $10,000

    Payment amount

    Select an income amount between the minimum and maximum limit

    Use our calculator

    Payment frequency

    Twice monthly, monthly, quarterly, half-yearly or yearly

    Investment options

    Choose from nine investment options

    Partial withdrawals

    You are unable to make personal withdrawals except in limited circumstances

    Download PDS

     

  • Flexible income

    VicSuper Flexible Income provides you with a low-cost way to get a regular income from your super savings.

    Why VicSuper Flexible Income?

    • A regular income – Receive a regular income, paid into your bank account.
    • Competitive fee structure – No entry or exit fees, and no commissions paid to financial planners.
    • Invest your savings – Earn investment returns even while you're receiving your payments.
    • Tax benefits – Once you're age 60, pension payments are tax-free.
    • Access to your account 24/7 – VicSuper MembersOnline is a secure online service provided as part of your membership where you can monitor and manage your account, anywhere and at any time.
    • Expert advice – Access to personal advice at no obligation.

    At a glance

    VicSuper Flexible Income

    Suitable for people who are retired or eligible to access their super and want to receive a regular income from their super savings

    Minimum investment

    $10,000

    Transfer balance cap

    There is a transfer balance cap on the amount of superannuation savings that can be transferred into certain pension accounts (excluding Transition to Retirement income streams), For the 2018/19 financial year, the cap is $1.6 million. This will be indexed in line with the consumer price index in $100,000 increments. Members should be aware that additional tax will apply if the cap is exceeded. It’s important to note, this cap applies to all pension accounts (except Transition To Retirement income streams) you may have

    Payment amount

    Select an income amount between the minimum and maximum limit

    Use our calculator

    Payment frequency

    Twice monthly, monthly, quarterly, half-yearly or yearly

    Investment options

    Choose from nine investment options

    Partial withdrawals

    You can make partial withdrawals at any time (except from money invested in a Term Deposit before its maturity date). Minimum of $1,000 per withdrawal

    Download PDS

     

    For details on withdrawals, changing your payments, changing your investment options and nominating beneficiaries, see For details on withdrawals, changing your payments, changing your investment options and nominating beneficiaries, see Managing your Flexible Income.

     

     

     Competitive fee structure 

    Fee type Amount
    Administration fee1,2
    If the account balance is under $4,300: Account-keeping fee $0 per week plus

    Administration fee 2% pa 
    If the account balance is $4,300 or more: Account-keeping fee $1.50 per week plus

    Administration fee 0.22% pa
    Investment fee2,3 From 0.00% to 0.44% (estimated) depending on your investment option.
    Indirect cost ratio2,3 From 0.00% to 0.50% (estimated) depending on your investment option.
    Contribution fee Nil
    Investment switching fee Nil
    Withdrawal fee  Nil

     


    1
     The administration fee and account-keeping fee are deducted from your account at the end of each month in arrears. These fees are capped at a combined total of $125 per month per account.

    2 If your account balance for VicSuper Flexible Income is less than $6,000 at the end of the VicSuper’s income year, the total combined amount of administration fees, investment fees and indirect costs charged to you is capped at 3% of your account balance. Any amount charged in excess of that cap must be refunded.

    The investment fees and ICR are an estimate for the 2019/20 financial year based on the estimated investment related costs incurred for the 12 months ended 30 June 2019. Actual investment fees and indirect costs may vary and cannot be estimated precisely in advance. If it becomes apparent that actual costs will differ materially the estimates will be updated.

     

  • Guaranteed Income accounts

    VicSuper offers two Guaranteed Income accounts1:

    • Guaranteed Income for Life, which pays an income for the rest of your life, and
    • Guaranteed Fixed Term Income, which pays an income for your chosen term (from 1-40 years).

    One, or both, of these accounts may suit you, depending on your circumstances.

    How do they work?

    In return for your initial lump sum investment, you receive a series of payments for a period of time, as nominated by you (either as monthly, quarterly, half-yearly or yearly payments).

    They're generally best suited to those who want the security of receiving a set amount of income over an agreed period of time.

     

    At a glance

    Guaranteed Income for life Guaranteed Fixed Term Income
    Suitable for members aged 60 or above who are looking to convert part of their super into a guaranteed income for the rest of their lives.
    Suitable for members aged 60 or above who are looking to convert part of their super into a guaranteed income for a set period of time.
    Minimum investment

    $10,000
    Minimum investment

    $10,000
    Payment amount

    The amount of your regular income payments is determined at the time you invest in the account. It will depend on the initial investment, prevailing interest rates, the account options you choose, the nominated withdrawal period and your life expectancy (and the life expectancy of any reversionary) at the time you invest in the account. 
    Payment amount

    The amount of your regular income payments is determined at the time you invest in the account and will depend on the initial investment, prevailing interest rates, the account options you choose, and the investment term selected.
    Payment frequency

    Monthly, quarterly, half-yearly or yearly.
    Payment frequency

    Monthly, quarterly, half-yearly or yearly, unless you choose to invest in a one year Guaranteed Fixed Term Income account, in which case you must receive payments monthly, quarterly or half-yearly.
    Investment term

    Your lifetime or the lifetime of you and your reversionary.
    Investment term

    1 to 40 years.
    Withdrawal period

    The minimum withdrawal period is 10 years and the maximum period is life expectancy, subject to regulatory requirements. Speak to one of our financial planners for further information.
    Withdrawal period

    1 to 40 years. Speak to one of our financial planners for further information.
    Download PDS Download PDS

     

    The income you receive is determined when you first invest, and is then paid over your nominated term – regardless of market ups and downs. And, if you have a Guaranteed Fixed Term Income Account, you can elect to receive some or all of your initial investment amount in your regular payments, or as a lump sum payment at the end of the term.

    Our Guaranteed Income accounts also have the following features1:

    • ability to choose an option that protects you from increases in the cost of living (for fixed terms of two years or more)

    • option to nominate a partner to receive any remaining benefits in your account as an ongoing income if you die

    • option to choose a withdrawal period, when some money will be paid to your beneficiaries or estate if you die during that period

    • ability to withdraw fully within the withdrawal period

    • the cost of administering the account is included when the payment rate is first determined, so there are no ongoing direct fees or charges

    • retirement income payments are tax-free

    1 The money you invest in a Guaranteed Income account is invested in a life policy (Policy) issued to VicSuper by Challenger Life Company Limited (ABN 44 072 486 938, AFSL 234670) (Challenger Life), a life insurance company within the Challenger group of companies. The benefits provided by the Guaranteed Income accounts are supported by the Policy, and not VicSuper Pty Ltd (VicSuper) as Trustee of the VicSuper Fund. VicSuper will only pay members their payments under the Guaranteed Income accounts to the extent that the Trustee receives payment from Challenger Life. Challenger Life’s ultimate parent is Challenger Limited (ABN 85 106 842 371, AFSL 234670). Neither Challenger Limited nor any other company within the Challenger group of companies guarantees the performance of Challenger Life’s obligations or assumes any liability in connection with the Policy. All references to guarantee refer to amounts payable under the Guaranteed Income accounts being guaranteed from the available assets of Challenger Life’s Statutory Fund No.2. For more information about the guarantee, limitations and risks associated with the guarantee, please read the Guaranteed Income Product Disclosure Statement.

    2Please refer to the Guaranteed Income Combined Financial Services Guide and Product Disclosure Statement for more detailed information regarding the Guaranteed Income products.

     

    Fees and charges

    Fee type How and when paid Amount 


     
    Guaranteed Income for Life
    Guaranteed Fixed Term Income 
    Investment fee Not applicable  Nil1 Nil1
    Administration fee
    Included in the calculation of the income payment (not deducted directly from an account of yours or from your income payments).
    0.15% pa of initial investment
     
    RCV100 
    0.20% pa of initial investment

    RCV 0-99
    0.20% pa of reducing initial investment
    Buy-sell spread
    Not applicable Nil
    Nil
    Switching fee
    Not applicable Nil
    Nil
    Advice fees 

    Relating to all members investing in the product.
    Not applicable Nil
    Nil
    Other fees and costs

    Refer to 'Additional explanation of fees and costs' in the Guaranteed Income Combined FSG and PDS for information about other fees and costs such as advice fees for personal advice.  

    Indirect cost ratio
    Not applicable Nil1
    Nil1
     

    1. Challenger Life and VicSuper do not impose additional fees or expense recoveries in relation to your account. In setting the amount of regular payments, Challenger Life takes into account various assumptions about longevity and investment returns as well as the cost of providing the product to VicSuper and its members.

    For further details on fees that apply to VicSuper Flexible Income members refer to the Guaranteed Income Combined FSG and PDS.


Get expert advice

There's a lot to think about when starting a retirement income. Our financial planners can help you work out a strategy that suits you.
There's no obligation, and in most cases, no additional cost either. Find out about our advice service.

 

Very helpful to know that our retirement strategy will deliver what we want if we continue along the proposed path, and that our super will last the distance.

Joe
Member comment after meeting one of our financial planners