Tax

RI Term Allocated Pension and tax

If you already have a RI Term Allocated Pension account, you can save on tax in the following ways:

  • Your regular income from your pension is tax free if you’re 60 or over
  • Investment earnings in your pension account are tax-exempt

These benefits are also available with our RI Allocated Pension, which is currently open to new members.

Here’s a summary of how tax applies to your RI Term Allocated Pension account.


Different parts of your pension are taxed differently

Your RI Term 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 don’t 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 47% 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 RI Term Allocated Pension account. For example, it would include employer and salary sacrifice contributions.

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

Your regular income is drawn from both components

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

Here's an example of how income payments are taxed according to the components of your account.

Example of RI Term Allocated Pension tax treatment

Example: Fiona is 63 and has $250,000 in her RI Term Allocated Pension account

  • 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.

For more information about how your RI Term Allocated Pension is taxed, please call your Member Services Centre on 13 43 72.

Page last updated 11 September 2024

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