A Kinetic Smart Pension allows you to:

  • Draw a regular income from your super rather than taking it as a lump-sum
  • Create a tax-effective environment for your super savings
  • Control your retirement income by selecting how much and how often you want to receive payments.

 

Like your super, you can choose how your money is invested by selecting investment options that suit you.

Although the amount you choose to receive from your pension is up to you, a minimum payment based on your age and account balance must be paid each year (maximum annual limits will also apply to transition-to-retirement pensions). You can change the frequency and amount at any time.

 

What we offer

Kinetic Smart Pension offers two types of pensions:

Account-based pension

If you have reached your preservation age and retired, or have met some other condition that allows your superannuation to be released without restriction (‘condition of release’), you can use your superannuation savings to purchase an account-based pension.

Transition-to-Retirement pension (TTR)

If you’re nearing retirement but don’t want to stop working entirely, you may be eligible for a ‘transition-to-retirement pension’.

Age dependent tax benefits

If you're 60 and over

  • No tax payable on the transferred amount used to start a pension*
  • No tax on pension payments or withdrawals from your pension account.

 

If you're under 60

  • No tax payable on the transferred amount used to start a pension*
  • Tax will be deducted from your regular pension payments on a ‘Pay As You Go’ (PAYG) basis, in the same way tax was deducted from your salary when you were an employee. Provided you have reached your preservation age, you could claim a 15% rebate on the taxed portion of pension payments made to you and 10% of the untaxed portion.

 

*except where that amount includes an untaxed element, then 15% is deducted from that amount.

Tax on investment earnings

TTR pension 

Investment earnings of Transition-to-Retirement (TTR) pensions are not tax exempt and are subject to a maximum tax rate of 15%. Investment earnings tax apply to TTR accounts until you:

  • reach age 65, or
  • earlier, if you notify (and satisfy) us that you have met some other condition of release that allows you to fully access your TTR account balance such as retirement after reaching your preservation age, suffering a terminal medical condition or permanent incapacity. 

 

Once you turn 65 years of age (or notify us that you have met another condition of release), your TTR account will convert to a standard Account Based Pension (referred to as a ‘retirement phase’ pension under the legislative changes), which is exempt from tax on any investment earnings, unless you instruct us otherwise. 

Once your account converts to an Account-based pension it will be subject to the transfer balance cap.

Account-based pension 

Investment earnings on pension assets associated with ‘retirement phase’ pensions (like our standard Account-based pension) are not subject to tax.

Transfer balance cap

The Government introduced a lifetime transfer balance cap of $1.6 million (2017/18 financial year) for retirees on the amount they can transfer amount from superannuation accounts to retirement income accounts with tax-free investment earnings (retirement phase accounts). This cap will be indexed in line with the Consumer Price Index, rounded down to the nearest $100,000. The amount of indexation you are entitled to will be calculated proportionally based on your available cap space. Only the amount of remaining cap space is indexed. 

It’s important to remember that the cap takes into account all retirement phase pension accounts you have (not just your standard Account-based pension in Kinetic Smart Pension). However amounts in TTR pensions will not count towards your transfer balance cap. 

It is also important to be aware that if you exceed the transfer balance cap you may be required to pay additional tax. For further information about the transfer balance cap and what you need to do if you exceed it, go to ato.gov.au/superchanges 

Lump-sum payments

All payments (in cash) from a TTR pension are treated as pension payments for tax purposes. It is not possible to have payments treated (and taxed) as lump sum withdrawals.

Social security and the age pension

The Centrelink Age Pension provides income support for eligible older Australians. 
To be eligible for a Centrelink Age Pension payment, you must meet:

  • Age and residence requirements
  • An income and assets test

 

From 1 July 2017, the qualifying age for the Centrelink Age Pension will increase from 65 years to 65 years and 6 months. The qualifying age will then increase by six months every two years, reaching 67 years by 1 July 2023.

Talk to a financial adviser or contact Centrelink for more information.

Death benefits

When you die, your pension benefit will be paid to the person(s) you nominate subject to super law.
 

Reversionary beneficiary nomination

Can only be made when you start your pension account. After you die, we’ll continue to pay any balance of your Kinetic Smart Pension account to the reversionary beneficiary you’ve nominated. These payments will be made as regular pension payments until the balance in your pension account is exhausted, unless the reversionary beneficiary chooses to be paid a lump sum instead.

Binding beneficiary nomination

We must pay your benefit to the person(s) you nominated subject to super law. Binding nominations are valid for three years from the date it is signed by the member and if left to expire it will be treated as a non-binding nomination (used only as a guide and Kinetic Smart Pension will make the final decision (subject to super law) on how the benefit is paid).


Binding beneficiaries must be witnessed, signed and dated by two adults over 18 who are not your nominated beneficiaries.

Lump-sum payments to dependants are generally tax-free. However, there may be tax involved if paid to non-dependants. Learn more about who you can nominate.