Our firm advises on the establishment of account based pension arrangements (previously allocated pensions), which provide a significant number of advantages in retirement. You are considered to have retired if you have ceased working or after reaching your preservation age and you have no intention of returning to the workforce for more than 10 hours per week. The preservation age depends on when you were born as set out in the table below.
| When Born | Preservation Age |
| Before 1 July 1960 | 55 |
| 1 July 1960-30 June 1961 | 56 |
| 1 July 1961 – 30 June 1962 | 57 |
| 1 July 1962 – 30 June 1963 | 58 |
| 1 July 1963 – 30 June 1964 | 59 |
| After 30 June 1964 | 60 |
An account based pension is one way of paying a superannuation benefit, which allows you to draw down regular pension payments from your superannuation account.
You can choose any amount of pension payment over the minimum pension threshold provided by the legislation. The percentage of your accrued benefits that must be taken as a minimum pension depends on your age as set out in the table below.
| Age | Minimum % withdrawal for the year 1 July 2018 to 30 June 2019 for certain pensions and annuities |
| Under 65 | 4% |
| 65-74 | 5% |
| 75-79 | 6% |
| 80-84 | 7% |
| 85-89 | 8% |
| 90-94 | 11% |
| 95 or more | 14% |
If you are under 65 years and have not had a termination of employment then the maximum pension you may take on an annual basis is 10% of your accrued benefits used for the pension as at the commencement of each year.
Your pension is tax exempt if you are 60 years or over.
You are entitled to change the level of your pension income at any time (provided the amount requested is over the minimum and if applicable, below the maximum payment allowable under the legislation) by contacting the trustee of the fund. You are also entitled to cease the pension at any time. As a consequence, your benefits will then revert to accumulated benefits in the fund and exposed to tax on the income at a rate of 15%.
Before commencing an account based pension, our firm advises on the procedures and prepares the necessary documentation. In particular, we will review the trust deed.