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Important changes for your Transition to Retirement

From 1 July 2017, the Federal Government will introduce changes to super and retirement accounts. Some of these measures will affect you if you have a Transition to Retirement allocated pension account.
Read the summary below to find out about important changes to your allocated pension and your investment plan.
Even if you don't have a Transition to Retirement arrangement with your super account, you should consider this information when planning your retirement.

Super Matters Transition to Retirement changes

What will change?

The following changes will affect Transition to Retirement accounts from 1 July 2017:

    • The investment earnings from money in Transition to Retirement pensions will no longer be tax exempt.  These earnings will be taxed at a concessional rate of up to 15%, regardless of when the Transition to Retirement pension started. The tax treatment of regular income payments from pension accounts will not be affected.
    • Super income stream payments can no longer be treated as a lump sum for tax purposes.  Members under 60 who access part of their super as a lump sum payment will be subject to income tax.
    • A $1.6 million cap, or limit, will apply on the total amount of super that can be moved to, or held in, a tax-free retirement account.  However, this cap won't affect transfers to Transition to Retirement pensions because they aren't considered retirement accounts.

How these changes affect you

If you're currently using a Transition to Retirement strategy with your GESB account, here's what these changes mean for you.

    • Your investment will be switched to a taxed plan.
      We need to create new investment plans for our Transition to Retirement members that match our existing plans. We will then automatically switch your investment to the corresponding new plan during the last week of June.

      Your new investment plan will mirror your existing plan at the time of transfer. This means it will have the same unit price (market value), asset allocation and risk profile. For example, if your pension is invested in the Balanced plan, your funds will be transferred to the new Balanced plan for Transition to Retirement.

      Tax of up to 15% will apply to the investment earnings in these plans from 1 July.

    • Once you reach age 65, your pension will no longer be automatically transferred to our Retirement Income Allocated Pension. If you'd like to open a Retirement Income Allocated Pension, you'll need to apply and be aware of the $1.6 million cap on the balance of your new retirement account.

What happens next?

We will contact our Transition to Retirement members with more information on these changes, including when we will be switching to the new investment plans, in May.

From 1 July, the details of the new Transition to Retirement investment plans will be available in the Retirement Income Allocated Pension Product Information Booklet.

Let us know if you've already retired

If you've permanently retired or resigned from your employment, and you've reached age 60, please complete a notification of retirement or resignation form.

This will tell us you're eligible to access all of your super. It also means investment earnings from the money in your allocated pension account remain tax free from 1 July 2017. Please note that from this date, the $1.6 million cap will apply when you move from transition to retirement to full retirement.

Where to find more information and help

We understand this is a complex topic. If you would like to learn more about these changes and your Transition to Retirement, you may find these resources helpful:

    • 2016/17 Federal Budget - changes to super: read a summary of the Federal Government's changes, including the $1.6 million cap on retirement account balances and lower caps on before-tax and after-tax super contributions.
    • Investment Centre: learn about how your allocated pension is invested, and view our current investment plans.
    • Retirement Options Service: our experts can provide factual information on your GESB accounts and help you take your next steps towards retirement, such as opening a Retirement Income Allocated Pension.
    • Find a personal financial adviser: if you'd like advice for your unique situation, read our guide to choosing a professional financial adviser.

If you have any questions about your account, please call your Member Services Centre on 13 43 72. We're available between 8.30am and 5.30pm (WST), Monday to Friday.

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