Retirement Income Allocated Pension

With a Retirement Income Allocated Pension, you can receive a regular income from your retirement savings, paid monthly, quarterly or annually into your nominated bank account.

You can choose how much to be paid from your retirement savings each year, subject to limits set by the Commonwealth government.

New members welcome

Retirement Income Allocated Pension is open to all current and former GESB members and their partners.

Tax benefits

If you’re 60 or over, your Retirement Income Allocated Pension payments and lump-sum withdrawals are tax-free, making it a tax-effective investment.

Investment plan

Choose the type of assets your super is invested in through your investment plan.

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We’re here to help. Call us on 13 43 72 if you have any questions about your account

  • Overview

    We’ve looked after your super and we can take care of your retirement income too. With a Retirement Income Allocated Pension, you can:

    • Convert your super into a regular income stream
    • Get paid monthly, quarterly or annually into your nominated bank account
    • Make lump-sum withdrawals of $1,000 or more at any time, with a fee of $51 for each lump-sum withdrawal
    • Invest your account balance in a choice of investment options to generate tax-free returns
    • Use Member Online to manage your account online

    If you’re 60 or over, your pension payments and lump-sum withdrawals will be tax-free.

    Please note from 1 July 2017, a $1.6 million cap will apply on the total amount of super you can transfer to or hold in a tax-free retirement account. Find out more about the $1.6 million transfer balance cap.

    Make the most of our tools, services and expertise

    If you'd like to learn more and make informed decisions about how to manage your super and retirement savings, we can help. As a GESB member, you have access to:

    We're the largest WA-based super provider with $24 billion in funds under management (as at 30 April 2017) for current and former WA public sector employees. We’ve been supporting members for over 75 years, offering super and retirement products, access to insurance as well as financial information and educational resources.

  • Your investment options

    We invest your super across a range of different asset classes to give you the best chance to grow your retirement savings. You can have your super automatically invested in the Balanced plan - or you can choose your investment plan. This means you can:

    • Choose the asset classes your super is invested in, from Shares to Cash.
    • Choose how much of your super is allocated between the asset classes.
    • Change your investment plan to suit your retirement savings goals.

    Your super might be one of the biggest investments you’ll ever make. The investment plan you choose now can make a difference to the amount of income you receive from your pension and how long it will last.

    Different assets create different returns

    Your Retirement Income Allocated Pension offers a range of investment plans. These plans invest in different assets, with the returns linked to how the financial markets perform.

    You can choose to invest in a range of different asset class allocations through our Readymade plans or create your own combination of asset classes with Mix Your plan.

    You can choose a Readymade plan

    There are four Readymade plans with different levels of risk and return expectations.

    Retirement Income Allocated Pension Readymade plans

    Investment plan

    Expected risk/return profiles

    Growth plan

    High risk and return

    Balanced plan

    Medium to high risk and medium return

    Conservative plan

    Low to medium risk and low return

    Cash plan

    Very low risk and low return


    For more details, please see investment options - Retirement Income Allocated Pension.

    You can choose the Cash plan and another Readymade plan

    This means some of your money will be invested in the Cash plan and the rest of your money in another Readymade plan. You can have your pension paid from the two plans in a certain order - for example, the Cash plan first. Or you can choose a percentage of your pension payment to be taken from each investment plan. If there are not enough funds in your chosen plan, then the rest of your payment will be taken from your other plan.

    The amount of money in each investment plan will reduce as your pension payments are made. From time to time you might like to review the amounts in your investment plans and transfer money between them.

    You can Mix Your plan

    There are five Mix Your plan options which allow you to select your own mix of asset classes.

    Retirement Income Allocated Pension Mix Your plan

    Investment plan

    Expected risk/return profiles

    Australian Shares

    Very high risk and high return

    International Shares

    High risk and return

    Property

    Very high risk and high return

    Fixed Interest1

    Medium risk and low return

    Cash

    Very low risk and low return

    You can choose the order or the percentage of your pension to be paid from each of your asset classes. To maintain your chosen percentage, you’ll need to check there is enough money invested in your asset classes. If there are not enough funds in one of more of your asset classes, the rest of your payment will be drawn from across your other asset classes.

    You may also need to make changes to your Mix Your plan to make sure the percentage held in each asset class remains the same over time. Find out more about how Mix Your plan works.

    For more details, please see investment options - Retirement Income Allocated Pension.

    Need more help with your investment plan?

    To change your investment plan, download the investment choice - Retirement Income Allocated Pension form.

    1 Mix Your Plan Fixed Interest invests in Investment Grade Bonds.

  • Fees and other costs


    We may make changes to the fees we charge

    From time to time, we might need to change our fees to make sure the structure and level of fees is appropriate, including any extra costs from government taxes or statutory charges.

    We’ll always let you know about any changes through our website or your Member Statement. If the change is an increase in fees or charges, we’ll give you at least 30 days’ notice.

    Fees are charged in different ways

    Below is a general guide to the fees and costs for a Retirement Income Allocated Pension account.

    Other fees, such as activity fees or fees for personal advice, might be charged, depending on the activity or advice you choose.

    Retirement Income Allocated Pension fees and other costs

    Type of fee or cost

    Amount

    How and when paid

    Investment fee

    Nil

    Not applicable.
    Costs incurred that relate to the investment of assets and that are not otherwise charged as an administration fee or other fee mentioned in this table are deducted from the fund assets before the daily unit price is calculated.

    The investment fee is noted as nil because it is not a separate fee, and is included in the total Indirect Cost Ratio (ICR) shown below.

    Administration fee

    The fee for managing your account

    0.20% p.a.

    Not deducted from your account as a fee, but is deducted from investment returns before earnings are applied to your account

    Establishment fee

    An establishment fee is an amount paid or payable for the establishment of a member’s interest in a product

    $51

    Deducted from your new Retirement Income Allocated Pension account, once it’s been created

    Buy-sell spread

    The fee for transaction costs relating to the purchase and sale of our assets

    Nil

    Not applicable

    Switching fee

    The fee for changing your investment plan

    Nil

    Not applicable

    Exit fee

    The fee for making a withdrawal

    $51

    Deducted from your account for each lump-sum withdrawal from your account. This fee doesn’t apply for your regular pension payments.

    Advice fees

    Advice fees relating to all members investing in Retirement Income Allocated Pension

    Nil

    Not applicable

    Indirect Cost Ratio (ICR)1

    The ICR includes all costs that are not deducted directly from your account.

    These include all investment costs related to managing the investments in the investment plan you have chosen.

    Estimated to be between 0.05% p.a and 0.42% p.a of the value of your investment, depending on which investment plan you choose2

    Not deducted from your account as a fee, but is deducted from investment returns before earnings are applied to your account

    For more information on the types of fees and costs that may apply to your account, see page 10 of the Product Information Booklet.

    Fees do apply for some optional services

    We do charge fees for some of our services and transactions but only if you use these services.

    For example, if you choose to make an appointment for our Retirement Options Service, a fee of $465 will apply. You can choose to have this fee deducted from your account.

    Find out more about our pay-for-service fees.

    1 The Indirect Cost Ratio (ICR) includes all of the investment costs and any additional underlying costs relating to your investment. It is an annual percentage fee which covers the cost of managing the fund's investments including a proportion allocated to risk reserves. Retirement Income Allocated Pension's ICR is not fixed, and is reviewed periodically and adjusted to take into account prevailing investment expenses. The actual ICR can only be determined at the end of each financial year.
    2 The Indirect Cost Ratios for Retirement Income Allocated Pension's other investment plans are different. They vary depending on the asset allocation and complexity of the plan.

  • Your income options

    A Retirement Income Allocated Pension converts your super into a regular income, which you can adapt to suit your needs. This means you can:

    • Choose how much income you’re paid, within limits set by the Commonwealth government.
    • Get paid monthly, quarterly or yearly into a bank account in your name.
    • Make lump-sum withdrawals of $1,000 or more, provided that at least $1,000 remains in your account (unless your account is to be closed). There is a fee of $51 for each withdrawal.
    • Change how much you’re paid and how often by completing a payment variation form.

    Please note the option for lump-sum withdrawals is not available with Transition to Retirement.

    How to choose an income that suits your needs

    To decide on the best way to receive your pension payments, it can help to think about:

    • Your lifestyle and expenses
    • Whether you qualify for income payments from the government, such as the Age Pension
    • Any other income you receive from other sources
    • How much your partner earns (if you have a partner earning an income)
    • How long you need your pension to last
    • Your minimum annual pension (see the section below)

    See Government Age Pension and cost of living in retirement to help you work out your income needs.

    You might also want to ask us about our Retirement Options Service or seek personal financial advice for your situation.

    You need to withdraw a minimum amount every financial year

    The Commonwealth government has set a minimum annual pension limit. This is the percentage of your pension account balance that we need to pay you each financial year.

    Your minimum annual pension rate depends on your age:

    Minimum annual pension rate

    Age

    Percent of account balance (%)

    Under 65

    4%

    65-74

    5%

    75-79

    6%

    80-84

    7%

    85-89

    9%

    90-94

    11%

    95 and above

    14%

    Each year, we multiply your pension account balance on 1 July by your minimum annual pension rate.  We’ll let you know what your new minimum annual pension is, and if we need to change your payments to ensure you receive at least this amount.

    During your first year, we use your account balance on the date you joined and we work out your minimum pension on a pro-rata basis. If you open an account in June, you can also choose to receive your first payment after 1 July.

    If you’re planning to make a lump-sum withdrawal to close your account, and you haven’t received your required minimum pension, then we’ll need to pay your outstanding pension before we can pay your lump sum.

    If you have a Transition to Retirement pension, a maximum limit also applies for your pension payments.


    Use our example to work out your minimum annual pension

    Chris is 60 years old and has $200,000 to invest in a Retirement Income Allocated Pension on 1 July 2016. We’ve worked out his minimum annual pension below. If you print this page, you can add your own details in the space provided.

    Work out your minimum annual pension income

    Chris’ details

    Chris

    Your details

    You

    Account balance (A)

    $200,000

    Your account balance (A)

     

    Chris’ age (years) (B)

    60

    Your age (years) (B)

     

    Minimum annual pension payment (C)
    (from table above)

    4%

    Your minimum annual pension payment (C)
    (from table above)

     

    Chris’ minimum annual pension income

    Chris must receive a pension income of at least this amount for this financial year

    $200,000 x 4% = $8,000

    Your minimum pension amount (A multiplied by C)

    You must receive a pension income of at least this amount for this financial year

     

    Ready to set up your regular pension payments?

    Find out how to open a Retirement Income Allocated Pension account.

  • Retirement Income Allocated Pension and tax

    When you open a Retirement Income Allocated Pension account, you might need to pay tax on the money you transfer from your super. How you’re taxed depends on whether you have a taxed fund, like GESB Super, or an untaxed fund, like West State Super or Gold State Super.

    In general, you pay less tax when you transfer your super to an allocated pension, than you do if you take your super as a lump-sum payment. Find out more about paying tax when taking your super money out.

    Your investment earnings are tax-free and you could pay less tax

    A Retirement Income Allocated Pension offers tax benefits, which means you might pay less tax than you would if you chose another type of investment. There are two ways you can benefit:

    • Investment earnings in your pension account are tax-exempt
    • If you’re 60 or over, your regular income payments and lump-sum payments from your pension are tax-free

    Here’s a summary of the tax rules that apply to your Retirement Income Allocated Pension account.

    Different parts of your pension are taxed differently

    Your Retirement Income Allocated Pension account may include two different parts or ‘components’. Each part is taxed differently, depending on where the funds come from. You might have:

    1. A tax-free component - the tax-free part of your super benefit that was transferred to your pension account. You do not pay tax on this amount. For example, it would include personal contributions made to your super, that you didn’t claim as a tax deduction. If you transferred from West State Super or Gold State Super, it would also include any part of your benefit that was taxed at 49% because your balance was above the untaxed plan cap.
    2. A taxable component - the taxable part of your super benefit that was transferred to your pension account. You may pay tax on this part of your pension when you access it. For example, it would include employer and salary sacrifice contributions.

    To find out more about the tax components of your pension account, please call your Member Services Centre on 13 43 72.

    How tax applies to your regular income and lump-sum payments

    Here’s a summary of how tax applies to your regular income payments and any lump-sum payments from your Retirement Income Allocated Pension.

    Retirement Income Allocated Pension tax treatment

    Component of your pension account

    Age

    Lump-sum payments tax withheld rate (including 2% Medicare Levy)

    Income stream payments tax withheld rate (plus 2% Medicare Levy)

    Taxable component - taxed element

    Under Commonwealth preservation age

    22%

    Taxed at your marginal tax rate, with no tax offset1

     

    Commonwealth preservation age - 59

    For payments up to the low rate cap of $195,0002 - 0%

    For payments above the low rate cap - 17%

    Taxed at your marginal tax rate, less a 15% tax offset on the taxable component

     

    60+

    Nil

    Nil

    Tax-free component

    Under Commonwealth preservation age

    Nil

    Nil

     

    Commonwealth preservation age - 59

    Nil

    Nil

     

    60+

    Nil

    Nil

    You will pay no tax if you’re aged 60 or over

    If you are 60 or over, your regular income stream payments or lump-sum payments from your Retirement Income Allocated Pension will be completely tax-free and you won’t need to include these payments in your personal income tax return.

    Examples of how regular income payments are taxed

    If your pension account has a tax-free and a taxable component, your regular income payments will include a proportional amount drawn from each component, based on the total value of your pension.

    Here are two examples of how income payments are taxed according to your age and the components of your account.

    Examples of Retirement Income Allocated Pension tax treatment based on age

    Example 1: Fiona, aged over 60

    Example 2: Frank, aged under 60

    • Fiona is 63 and transfers $250,000 to a Retirement Income Allocated Pension
    • Her $250,000 is made up of a $210,000 taxable component and a $40,000 tax-free component
    • She chooses monthly income payments of $1,600
    • Her monthly pension will include the following components:
      40,000/250,000 x 1,600 = Tax-free: $256
      210,000/250,000 x 1,600 = Taxable-taxed: $1,344
      Tax-free + Taxable-taxed = $1,600

    Fiona is over 60, so the total amount of her pension payment will be tax-free.

    • Frank is 57 and transfers $350,000 to a Retirement Income Allocated Pension
    • His $350,000 is made up of a $310,000 taxable component and a $40,000 tax-free   component
    • He chooses monthly income payments of $1,400
    • His monthly pension will include the following components:
      40,000/350,000 x 1,400 = Tax-free: $160
      310,000/350,000 x 1,400 = Taxable-taxed: $1,240
      Tax-free + Taxable-taxed = $1,400

    Frank is 57, so he will need to pay tax on the taxable-taxed component at his marginal tax rate (plus 2% Medicare Levy). A 15% tax offset on the taxable component is available to reduce the amount of tax he needs to pay. He will not pay tax on the tax-free component.

    To learn more about how your Retirement Income Allocated Pension is taxed, you can:

    1 Tax offset is available for a disability super benefit.
    2 For the 2016/17 financial year, indexed annually in line with Average Weekly Ordinary Time Earnings in increments of $5,000 rounded down.

  • Important documents

    To make the most of your retirement savings, it’s worth learning as much as you can about your Retirement Income Allocated Pension account, including the tax considerations and investment plans available.  

    Read the Product Information Booklet

    Download and print forms

    You can use Member Online to update your address and contact details. If you need to access or make changes to your Retirement Income Allocated Pension, please use these forms.

Page last updated 19 June 2017