What is an account based pension?
An account based pension (or pension account) lets you take your super as regular payments, when you retire.
By transferring money from your super to an account based pension like our Choice Income account, you can draw regular income payments, while your balance stays invested. This gives you the potential for continued investment returns throughout your retirement.
You choose how much income you want to receive and how often. And your money isn’t locked away.
You can withdraw extra money to pay for bills, holidays and other big ticket items whenever you need it.
Your benefits include:
- turning your super into a regular income
- keeping your savings working for you – money in your account stays invested
- saving on tax — tax-free income payments (from 60) and tax-free investment earnings
- having flexibility and control – you can access extra money whenever you need it
- topping up your Government Age Pension if you receive it
Why choose Choice Income account?
Our account based pension – Choice Income – is award-winning* with a history of strong long-term performance. With our low fees and members first approach, we can help you achieve your best possible retirement.
- Low fees, more money – we don’t pay commissions to advisers and profits go to members, not shareholders
- Strong long-term returns – 9.71% pa average annual 10 year rate of return for the Balanced option+
- Flexible payment options – you choose how much and how often you receive payments
- Range of investment options so you’re in control – Smart Default, PreMixed, DIY Mix and Member Direct
- Easy to manage payment and investment options via phone, your online account and mobile app
- Advice options to support you throughout retirement, including email, phone, face to face meetings and seminars
- Top up for your Government Age Pension (if you’re eligible)
- AustralianSuper members may be eligible for an instant boost to their account when they move to a Choice Income account – a tax saving called a Balance Booster
* Awarded the 2019 Canstar Outstanding value for account based pension
+Returns as at 30 June 2020. Investment returns aren’t guaranteed. Past performance isn’t a reliable indicator of future returns
compare usImportant things to know about Choice Income
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What is a balance booster?
When you move your AustralianSuper super account or TTR Income account to a Choice Income account, you could be eligible to receive a tax saving called a Balance Booster.
How Balance Booster works
When you have a super account or TTR Income account, AustralianSuper sets money aside to pay for future capital gains tax when investment assets are sold. When you move from a super or TTR Income account to a Choice Income account, your balance is transferred to a tax free environment and you could be eligible to receive an additional credit to your account balance – a Balance Booster.
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Minimum drawdown amounts for 2021-22
On 29 May 2021, the Government extended the COVID-19 measure – temporary reduced minimum drawdown amounts for account based pensions – to 30 June 2022.
If you're an existing Choice Income, your payment amounts may change from 1 July 2021 depending on
- what payment option you chose up to 30 June 2021,
- what your account balance is on 1 July 2021, and
- what your age is on 1 July 2021 and the relevant reduced minimum drawdown amount for 2021-22.
Find out more about minimum drawdown amounts for the 2021-22 financial year.
What does this mean for new Choice Income members?
If you open a Choice Income anytime from 25 March 2020 up to 30 June 2022, the Government's temporary reduced minimum amounts still apply up to 30 June 2022, unless you choose a larger amount.
All Choice Income members can change drawdown amounts anytime via their online account and withdraw extra money when they wish.
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Before you open Choice Income
You’ll need a minimum balance of $50,000 to deposit into your new Choice Income account, and it’s important to note you can’t add money to a Choice Income account once you’ve opened it.
It’s a good idea to make sure you have all your money in one place before you start. We can help you consolidate your super before opening an account based pension.
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Keep a little in super to keep your insurance
You’re not able to have insurance on a Choice Income account, so if you want to keep your insurance you may want to keep a balance of $10,000 in your super account. -
Changes to the transfer balance cap
The Government limits how much of your super you can transfer into an account based pension (such as Choice Income). This limit is known as the 'transfer balance cap' and refers to the total amount that can be held in any tax free retirement income streams. This cap does not apply to TTR Income accounts.
The cap:
- includes the total amount transferred from any superannuation account to any of your account based pensions, and
- is managed by the Australian Taxation Office, so it includes money across any super fund, including defined benefit schemes.
Before 1 July 2021, the general transfer balance cap is $1.6 million. From 1 July 2021, the transfer balance cap will be indexed to $1.7 million.
This means that from 1 July 2021 every individual will have their own personal transfer balance cap between $1.6 to $1.7 million, depending on their circumstances. The transfer balance cap will be:
- $1.7 million if you've never had a retirement income stream before 1 July 2021; or
- $1.6 million if you've already reached or exceeded the $1.6 million cap before 1 July 2021; or
- between $1.6 million and $1.7 million, if you've had a retirement income stream before 1 July 2021, but didn't reach the $1.6 million cap.
The ATO will calculate your transfer balance cap based on when you started your first retirement income stream and the highest ever balance of your transfer balance account. You can check your cap amount by logging into your myGov account.
The cap limits the total amount that you can have in the retirement phase to start a pension or annuity over the course of your lifetime, no matter how many accounts you hold or how many times you transfer money into the retirement phase.
Your transfer balance cap starts from the later of 1 July 2017 or the day you first start to become a recipient of a super income stream.
You can visit the ATO website for details.
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When you can get started
When you reach your preservation age and have permanently retired, you can open your Choice Income account. You are also eligible to open an account if you change jobs on or after turning 60 or if you’ve turned 65 (even if you’re still working).
Date of birth Preservation age (years) Before 1 July 1960 55 1 July 1960 – 30 June 1961 56 1 July 1961 – 30 June 1962 57 1 July 1962 – 30 June 1963 58 1 July 1963 – 30 June 1964 59 1 July 1964 or after 60
For more on eligibility please refer to the Choice Income Product Disclosure Statement.
Choice Income Product Disclosure Statement - pdf, 3.3MB
For people retiring and needing to draw an income from their savings in a tax-effective environment
Set up your account in a way that suits you
Your Choice Income account is flexible, so you can change your payment and investment options at any time.
When you join you can use the Smart Default option, or choose your own investment and payment options.
Choosing the Smart Default option
With Smart Default your payments and investment options are pre-selected, modelled and managed by investment experts. This means you’re:
- invested in 12% Cash and 88% Balanced investment option,
- initially receiving at least 6% of your balance each year; and as you get older this minimum amount will change (see table below),
- paid every two weeks, and
- able to change your payment and investment options at any time.
Smart Default drawdown amounts in 2021-22
On 29 May 2021, the Government extended the temporary reduced minimum drawdown amounts for account based pensions to 30 June 2022 (for 2021-22).
In financial years 2019-20 and 2020-21, we temporarily reduced the Smart Default drawdown amounts so members aged 80 years and over could manage their income payments differently during difficult times. We're extending these reduced amounts to 30 June 2022. (see table below)
Current Smart Default members will receive an email or letter in July 2021* to confirm their payment amounts for the financial year 2021-22. You don’t have to do anything, unless you choose to change your payment amount† and frequency. You can do this anytime by logging into your online account.
For details, visit australiansuper.com/MinimumDrawdowns
*In May 2021, members may have received an email or letter about changing Government minimum drawdown amounts from 1 July 2021. These changes no longer apply due to the Government's announcement on 29 May 2021.
†Maximum withdrawal limits apply for TTR Income members.
| Smart default option – Percentage of your balance you’ll receive each year | |||
|---|---|---|---|
| Your age on 1 July | TEMPORARY DRAWDOWN RATES END 30 JUNE 2022‡ |
DEFAULT DRAWDOWN RATES START FROM 1 JULY 2022§ |
|
| Under 80 | 6% | 6% | |
| 80 to 84 | 6% | 7% | |
| 85 to 89 | 6% | 9% | |
| 90 to 94 | 6% | 11% | |
| 95 and over | 7% | 14% | |
‡The temporary Smart Default drawdown rates are for the financial years 2019-20, 2020-21 and 2021-22 only, and end 30 June 2022.
§The default minimum drawdown rates for Smart Default apply from 1 July 2022, for the financial year 2022-23 onwards.
Choosing your own options
If you choose your own options, you can
- choose DIY and PreMixed investment options, or manage your account using Member Direct,
- decide how much income you’ll get (minimum limits apply), and
- decide how often you’ll get payments – fortnightly, monthly, quarterly or twice a year.
Proud winners of a Canstar 5-Star Rating for account based pension^
^AustralianSuper received the Canstar 5-Star Rating for Outstanding Value Account Based Pension in 2019. Full methodology available here.