Transition to Retirement Pension

Our Retirement Income Pension can be taken as either an RI Allocated Pension, a standard allocated pension product, or as a Transition to Retirement Pension, for those who want to access their super as an income stream whilst still working. Find out more about the differences between these two pensions.

Here we provide an overview of our Transition to Retirement Pension option.

The Transition to Retirement Pension is a ‘Transition to retirement income stream’ (TRIS) product as defined by the Superannuation Industry (Supervision) Regulations.

Once you’ve reached your Commonwealth preservation age, you can use your super to start a regular pension such as our Transition to Retirement Pension. Your Transition to Retirement Pension will be set up in one of our Transition to Retirement Pension investment plans, and you’ll be subject to the minimum and maximum pension limits.

This type of pension doesn’t allow lump-sum cash withdrawals, so it is also known as a non-commutable income stream. However, once you retire, you’ll be able to review your options and consider setting up a regular RI Allocated Pension.

New members welcome

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

Your income options

Choose to be paid monthly, quarterly or annually into your nominated bank account.

Investment plan

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

Use Member Online to manage your account

Login or register now

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 help you transition to retirement too.

    With our Transition to Retirement Pension, you can:

    • Convert part or all of your super into a regular non-commutable income stream
    • Choose to receive between the minimum 4% and a maximum of 10% of your super account balance each financial year, calculated at the start of the financial year
    • Invest your account balance in a choice of investment options
    • Use Member Online to manage your account online
    • You can also change your super account structures if your personal circumstances change
    • Receive payments directly into your bank account monthly, quarterly or annually
    • Change the amount of pension you receive each year, subject to minimum and maximum limits set by the Commonwealth government
    • Continue to work and have your contributions paid into your GESB Super or West State Super account

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

    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 over $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.

  • What is a Transition to Retirement Pension?

    Our Transition to Retirement Pension is an account which allows you access to your super as an income stream while you are still working. This could suit you should you choose to reduce your work hours, as the income you receive from your super benefits will help to make up for any loss of salary you may have. If you still want to work the same hours, you may consider using a Transition to Retirement Pension as a way to increase your income, or to maximise your retirement savings through salary sacrifice. There may be some tax benefits for you, however we recommend that you seek personal financial advice before making a decision. 

    To be eligible to open a Transition to Retirement Pension, you must have reached your Commonwealth preservation age (shown below). 

    A Transition to Retirement Pension does not allow lump-sum cash withdrawals, so it is also known as a non-commutable income stream. However, once you retire, you’ll be able to review your options and consider setting up a regular RI Allocated Pension.

    The benefits of a Transition to Retirement Pension

    Our Transition to Retirement Pension gives you the opportunity to:

    • Increase your super. You'll continue to work and can sacrifice some of your salary to super.
    • Reduce your hours. You can work less without reducing your overall income, as your pension will make up for your lower salary
    • Increase your income. You'll be receiving an income stream from a pension as well as your normal salary.

    You can find the right balance to suit your needs, with the flexibility to change your strategy as your circumstances change. We recommend that you speak with a financial adviser, accountant or tax adviser to help you decide if our Transition to Retirement Pension is right for you.

    Find out how transition to retirement works with your account:

    What is your Commonwealth preservation age?

    To be eligible to open a Transition to Retirement Pension from your GESB Super or West State Super account, you need to have reached what’s known as your preservation age:

    • If you were born before 1 July 1960, you can access your super now that you're over 55.
    • If you were born between 1 July 1960 and 30 June 1961, you can access your super when you turn 56.
    • If you were born between 1 July 1961 and 30 June 1962, it's when you turn 57.
    • If you were born between 1 July 1962 and 30 June 1963, it's when you turn 58.
    • If you were born between 1 July 1963 and 30 June 1964, it's when you turn 59.
    • If you were born after 1 July 1964, you can access your super when you turn 60.

    If you’re a Gold State Super member, you can start a Transition to Retirement Pension from the age of 55 but you’ll pay more tax if you access your super before you reach the Commonwealth preservation age.

    Transfer balance cap

    It is important to note that the transfer balance cap of $1.6 million does not apply to transition to retirement income pensions. Find out more about the $1.6 million transfer balance cap.

    Is transition to retirement right for you?

    Transition to retirement is a way you can access your super while you’re still working.

    Take our simple quiz to see whether it could be right for you.

    How old are you?
  • 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 TTR - 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 Transition to Retirement 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.

    Transition to Retirement Pension Readymade plans

    Investment plan

    Expected risk/return profiles

    Growth plan TTR

    High risk and return

    Balanced plan TTR

    Medium to high risk and medium return

    Conservative plan TTR

    Low to medium risk and low return

    Cash plan TTR

    Very low risk and low return


    For more details, please see investment options - Transition to Retirement Pension.

    You can choose the Cash plan TTR and another Readymade plan

    This means some of your money will be invested in the Cash plan TTR 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 TTR 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.

    Transition to Retirement Pension Mix Your plan

    Investment plan

    Expected risk/return profiles

    Australian Shares TTR

    Very high risk and high return

    International Shares TTR

    High risk and return

    Property TTR

    Very high risk and high return

    Fixed Interest TTR1

    Medium risk and low return

    Cash TTR

    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 - Transition to Retirement Pension.

    Need more help with your investment plan?

    To change your investment plan, download the investment choice - RI Allocated Pension and Transition to Retirement 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 Transition to Retirement Pension account.  

    There is a fee of $52 to open a Retirement Income Pension account. This fee will be deducted from your new account once it’s opened.

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

    Transition to Retirement 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 such costs are instead included in the total Indirect Cost Ratio (ICR) shown below.

    Administration fee

    The fee for managing your account

    Nil

    Not Applicable. Costs incurred that relate to the administration and operation of the Transition to Retirement Pension and that are not otherwise charged as a fee mentioned in this table are deducted from the fund assets before the daily unit price is calculated. The administration fee is noted as nil because it is not a separate fee, and such costs are instead included in the total Indirect Cost Ratio (ICR) shown below.

    Buy-sell spread

    Nil

    Not applicable

    Switching fee

    The fee for changing your investment plan

    Nil

    Not applicable

    Exit fee

    The fee to close your account or process a partial payment

    $52

    Deducted from your account when you close your account.

    Advice fees

    Advice fees relating to all members investing in Transition to Retirement Pension

    Nil

    Not applicable

    Other fees and costs1

      

    Indirect Cost Ratio (ICR)2

    The ICR includes all amounts that have reduced or will reduce the return on the Transition to Retirement Pension, that are paid from or reduce the amount or value of the investments in the investment plan you have chosen (including those investments held through an investment vehicle).

    These include administration costs and investment costs related to managing the investments in the investment plan you have chosen. The ICR is not charged to you as a fee, but is deducted from investment returns before earnings are applied to your account.

    Estimated to be between 0.26% p.a and 0.60% p.a of the value of your investment, depending on which investment options you choose3

    Deducted from the fund's assets before the daily unit price is calculated

    For more information on the types of fees and costs that may apply to your account, see page 10 of the Retirement Income Pension 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 $469 will apply. You can choose to have this fee deducted from your account.

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

    1 For information on other fees and costs such as activity fees (Family Law) and Advice fees (Retirement Options and Simple Advice), see the 'Additional explanation of fees and costs' section on page 9 of the Retirement Income Pension Product Information Booklet.
    2 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. Transition to Retirement 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.
    3 The Indirect Cost Ratios for Transition to Retirement Pension's other investment plans are different. They vary depending on the asset allocation and complexity of the plan.

  • Your income options

    A Transition to Retirement 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.
    • Change how much you’re paid and how often by completing a payment variation form.

    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
    • 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 and maximum annual pension (see the section below)

    Learn more about the benefits of  our Transition to Retirement Pension and if it’s right for you

    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.

    Use our example to work out your minimum annual pension

    Chris is 60 years old and has $200,000 to invest in a Transition to Retirement Pension on 1 July 2017. 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

     

    A maximum limit also applies for your pension payments

    With a Transition to Retirement Pension you can select a maximum payment of 10% of your account balance as calculated at the start of each financial year.

    Use our example to work out your maximum annual pension

    Work out your maximum annual pension income

    Chris’ details

    Chris

    Your details

    You

    Account balance

    $200,000

    Your account balance

     

    Chris’ maximum annual pension income

    $200,000 x 10% = $20,000

    Your maximum pension amount (Account balance multiplied by 10%)

     

    Ready to set up your regular pension payments?

    Find out how to open a Transition to Retirement Pension account.

  • Transition to Retirement Pension and tax

    When you open a Transition to Retirement 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 a transition to retirement product, 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 taxed up to 15%

    Investment earnings in your pension account are taxed at a concessional rate of up to 15%.

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

    Different parts of your pension are taxed differently

    Your Transition to Retirement 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 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 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 payments

    Here’s a summary of how tax applies to your regular income payments from your Transition to Retirement Pension.

    Transition to Retirement Pension tax treatment

    Component of your pension account

    Age

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

    Taxable component - taxed element

    Under Commonwealth preservation age

    Taxed at your marginal tax rate, with no tax offset1

     

    Commonwealth preservation age - 59

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

     

    60+

    Nil

    Tax-free component

    Under Commonwealth preservation age

    Nil

     

    Commonwealth preservation age - 59

    Nil

     

    60+

    Nil

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

    If you are 60 or over, your regular income stream payments from your Transition to Retirement Pension will be 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 Transition to Retirement 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 Transition to Retirement 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 Transition to Retirement 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 Medicare Levy of 2%). 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 Transition to Retirement Pension is taxed, you can:

    1 Tax offset is available for a disability super benefit.
    2 For the 2017/18 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 Transition to Retirement 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 Transition to Retirement Pension, please use these forms.

Page last updated 21 June 2017