2. Pensions
• LUCRF Pensions allow you to use your super (and
any other savings) to create a source of income.
• LUCRF Super offer two types of pensions:
• Transition Pension (TP), and
• Retirement Pension (RP).
3. Transition Pension (TP)
• Can be utilised by members over the age of 55
who are still working.
• The strategy involves rolling over part of your super
to a TP which will then pay you an income.
• This strategy can also be combined with salary
sacrifice. This will help you save tax and grow your
wealth more quickly.
4. About Transition Pension
income streams
• The pension income must be between 2% and 10%
of the pension balance for the 2010/11 financial
year.
• The pension income is tax free if you are over
the age of 60.
• A tax offset of 15% applies if you are aged between
55 and 59.
5. Advantages of having a
Transition Pension
• More take home pay as you are receiving some of
your super (concessionally taxed or tax free
depending on age) whilst you are still working.
• Less personal income tax when a TP strategy is
combined with a salary sacrifice strategy.
AND
6. Advantages of having a
Transition Pension
• Growing your retirement nest egg – all pension fund
investment earnings are tax free which means your
money works harder for you.
7. Retirement Pension (RP)
• Designed for members who have fully retired from
the workforce or have reached the age of 65.
• This strategy involves placing your retirement
savings (super and non-super) into a Retirement
Pension (RP).
8. Retirement Pension (RP)
• The RP allows you to draw an income stream
(regular pension payment) that has a minimum
limit with no maximum.
• All income received is tax free over the age of 60,
with a 15% tax offset applying to those between
the age of 55 and 59.
9. Advantages of having a
Retirement Pension
• Provides a regular income for your retirement,
making it easier for you to plan and budget
• Greater potential to qualify for the Government Age
Pension, as Centrelink exempts part of a pension
income stream under the income test
• Pension funds (just like TP) continue to be
invested with no tax on earnings.
10. Case study
• David is a 65 year old, single, retiree, who owns his
home.
• He has $150,000 in super, $10,000 in a bank
account and $20,000 in personal assets (includes
home contents of $10,000 and a motor vehicle
valued at $10,000).
11. Case study: Assets test
• Under the Government Age Pension ‘assets test’
David qualifies for a full age pension of $701.10
per fortnight (or $18,228 per year) as his total
assessable assets (super, bank account and
personal assets) are below the single, homeowner
lower limit threshold of $181,750
• Note: David’s owner-occupied home is excluded
from the assets test.
12. Case study: Income test
• Under the Government Age Pension ‘income test’,
if David converts his super into a Retirement
Pension (regular income), he will still receive the
maximum Age Pension.
• If David were to keep his money in an
accumulation super fund, drawing a yearly lump
sum, he would only receive a part Age Pension.
• Let us show you how…
13. Case study: Receiving maximum
Age Pension
$10,000 taken as $10,000 taken as
yearly lump sum from yearly income from RP
super
Income counted by $6,570 $2,210
Centrelink
Centrelink Age $16,841 $18,228 (maximum)
Pension received
Please note: The table above uses Centrelink rates and thresholds effective from 1 July
2010. These may change from time to time, which can alter the outcome shown.
14. How long will a LUCRF Pension
last?
It all depends on:
• Investment performance
• Level of income payments, and
• Money drawn from your account
(e.g. lump sums etc)
15. LUCRF Pension features &
benefits
• Regular payments to boost or replace your salary
• Choice of payment frequencies
• Market-leading products
• No commissions
• Low fees and no start-up or exit fees, and
• Personal and professional service
16. Find out more about LUCRF
Pensions
Get professional advice
• LUCRF Super offers personal financial advice
you can trust.
• Simple advice on super or pensions is
generally free.
