A transition to retirement pension (TRP) is designed for people who are still working, and have reached their preservation age (the age they are able to access their super, explained below). It is a tax effective way to ease into retirement, while continuing to grow your super.

• Once you reach preservation age (see table below), you have the option to open a TRP to withdraw regular income from your super account.
• There is no tax payable on those withdrawals once you are over age 60.
• You will continue to receive super guarantee payments from your employer, into your super accumulation account.

Because you don’t have to retire to have this type of pension, you have flexibility to organise your work and income, while still contributing to your super.

You can draw down a minimum of 4% up to a maximum of 10% of your TRP account balance as income in any year to help supplement any other income you receive.

A TRP allows you to access some of your super while you’re still working and receiving super payments from your employer, along with other contributions you may wish to make. With a TRP in smartMonday PENSION you may:

• work fewer hours but receive the same income – cut back your working hours and use your TRP income to make up for your reduced pay.
• work the same hours but receive more income – use the additional income from your TRP to cover extras (eg. home renovations).
• save more super but receive the same income – sacrifice some of your pay to grow your super while your TRP helps you replace some/all of your lost income.

More details are also available on our factsheet.

Anyone can open a TRP account if they have reached their preservation age (irrespective of their employment status.

Once you are eligible, you begin by moving some of your super into a smartMonday PENSION account. You will then begin receiving regular payments from that pension account into your bank account. If you are aged 60, the payments are tax free. You can choose how often you would like to receive them, provided the total meets the minimum and maximum requirements set by the government.

The amount in both your super account and pension account will remain invested and working for you.

Investment earnings within your accounts are taxed at 15%, the usual concessional superannuation tax rate.

If you’re age 60 or over, pension payments from a super fund are tax free and you don’t have to include them in your tax return. If you’re under age 60, any taxable amount of your pension income is taxed at your marginal rate of tax plus the Medicare levy. You may be eligible for a tax offset of up to 15% on any taxable amount.

Yes. You can continue to make contributions to your super (accumulation) account.

There may be favourable tax advantages for you in doing so, depending on your age and taxable income.

When you reach age 65 or you notify us that you satisfy a ‘condition of release’ such as permanent retirement or leaving employment after age 60, we will convert your TRP to a retirement pension. This will also allow you to withdraw lump sums.

Please note: The information above is general in nature and should not be relied upon as personal advice as your personal needs, objectives, and financial situation have not been considered. Before making a decision about any smartMonday branded product you should consider whether it suits your particular circumstances, and, where appropriate, you may wish to seek financial advice specific to your needs. If you do not have a financial adviser, you may contact us to ask about the advice services you can access through your membership.

Check out the FactSheet on Transition to Retirement

Our smartMonday smartCoach team are happy to help with your queries. If you are ready to start the transition into the weekend, or simply want to understand more about this option, please get in touch.

• Live chat with a smartCoach on our website when the speech bubble pops up
• phone 1300 262 241.
• email smartcoach@smartmonday.com.au

Also consider contacting your financial adviser.

You can find the smartMonday PENSION application form here.