Choice Income - our account based pension

*Chant West Pension Fund Fee Survey at 31 December 2021. Based on $250,000 invested in the AustralianSuper Balanced option.

† AustralianSuper received the Canstar 5-Star Rating for Outstanding Value in Account Based Pension in 2021. Ratings are only one factor to be taken into account when choosing a super fund. For details view canstar.com.au/star-rating-reports/account-based-pensions/

‡ Based on the AustralianSuper Balanced investment option compared to the SuperRatings Fund Crediting Rate Survey — SR50 Balanced (60–76) Index, to 31 December 2021. Investment returns are not guaranteed. Past performance is not a reliable indicator of future returns.

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.

From 1 July 2021, the general transfer balance cap is indexed to $1.7 million.

This means that from 1 July 2021 every individual has their own personal transfer balance cap between $1.6 to $1.7 million, depending on their circumstances. The transfer balance cap is:

• $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 calculates 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.

The government's reduced minimum drawdown rates have been extended for the 2022/23 financial year. This means from 1 July 2022, the reduced rates continue to apply to all account based pensions until 30 June 2023.

From 1 July 2023, the government's default minimum drawdown rates for the 2023/24 financial year will apply to all account based pensions, with no reductions.

Find out more about minimum drawdown rates.

What this means for new Choice Income members

If you open a Choice Income account anytime before 30 June 2023, the government's temporary reduced minimum rates still apply up to 30 June 2023, unless you choose a larger amount.

If you open a Choice Income account from 1 July 2023 onwards, the government's default minimum drawdown rates for 2023/24 apply, 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.

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). 

For more on eligibility please refer to the Choice Income Product Disclosure Statement. 

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.

Keeping 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.

If you choose your own options, you can

• decide how much income you’ll get (minimum limits apply)
• decide how often you’ll get payments – fortnightly, monthly, quarterly or twice a year, and
• choose DIY and PreMixed investment options, or manage your account using Member Direct,

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.

From 1 July 2022, the Smart Default drawdown rates will stay reduced until 30 June 2023. The government has extended reduced minimum drawdown rates for all account based pensions, to 30 June 2023.

For the financial years 2019/20, 2020/21 and 2021/22, we temporarily reduced the Smart Default drawdown rates so members aged 80 years and over could manage their income payments differently during difficult times. This temporary reduction will be extended for the 2022/23 financial year until 30 June 2023. (See table below)

If you're a current Smart Default member, you'll get an email or letter every July confirming your payment amounts for the next financial year.

You don’t have to do anything, unless you choose to change your payment options*. You can do this anytime by logging into your account.

For details, visit australiansuper.com/MinimumDrawdowns

^†The temporary Smart Default drawdown rates are for the financial years 2019/20, 2020/21, 2021/22 and 2022/23, and will end 30 June 2023.
^‡The default minimum drawdown rates for Smart Default apply from 1 July 2023, for the financial year 2023/24 onwards.

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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Seamless Transfer - Member Direct

If you have Member Direct listed investments with your AustralianSuper super account, you can maintain them when you retire with a Choice Income account.

By requesting a Seamless Transfer to Choice Income (download form) you don’t need to sell-down or re-purchase your investments, avoiding transaction/brokerage costs and market risk.

More importantly, by using Seamless Transfer, you won’t trigger a tax event and you will remain invested in the market during the transfer process.

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