How pensions work
Your superannuation money is used to set up an account with Australian Ethical, from which you can draw your pension.
Minimum and maximum income payments
Every year there is a minimum amount that must be drawn out by you from your pension. The limits are set based on aged-based percentages as prescribed by the Australian Government:
| Age | Minimum payment as a % of account balance |
|---|---|
| 55-64 | 2.0% |
| 65-74 | 2.5% |
| 75-79 | 3.0% |
| 80-84 | 3.5% |
| 85-89 | 4.5% |
| 90-94 | 5.5% |
| 95+ | 7.0% |
Where you are transitioning to retirement, there is a 10% maximum limit set on pension payments you can draw each year. There is no maximum limit in other circumstances.
How long will your money last
Your pension is payable until there is no money left in your account.
This product may not provide an income for the rest of your life.
Transitioning to retirement
You can start a pension while you are still working if you have reached your preservation age. By doing this you can
- ease into retirement by switching to part-time work
- receive regular income from your super account on top of your part-time income.
You can determine your preservation age from the Australian Taxation Office website.
To start a transition to retirement account, complete the pension application form in the super product disclosure statement (625 KB).
We recommend that you seek advice from a licensed financial adviser, accountant or tax agent to work out a financial plan that is best for you.
Payment upon death
In the event of your death the remaining balance in your pension account is paid to your beneficiaries. As it takes time to finalise the payment of your super to your beneficiaries, we will place your super into the defensive option to reduce the risk of it declining in value.
There are three ways to nominate your beneficiaries:
Preferred beneficiaries
You can make preferential nominations, which is non-binding and will only be used by Australian Ethical Super as a guide. You can select your preferred beneficiaries on the pension application form in the super product disclosure statement (625 KB), the change of details form or via the client login.
Binding beneficiaries
You can making nominations that are binding on Australian Ethical Super. This will override any preferred beneficiary nominations. To make a valid nomination, complete the binding death benefit nomination form.
Reversionary beneficiary
You can nominate one person to receive your pension via regular payments (retirement income stream). You can only make this nomination when first applying for the pension using the pension application form in the super product disclosure statement (625 KB).
Earning returns on your retirement income
Australian Ethical offers a number of different investment strategies to invest your pension. These investment strategies have different levels of risk and return. Find out more about our investment strategies.
