Snapshot of the First State Super Retirement Income Stream and Transition to Retirement Income Stream

 
Retirement income stream
(income after retirement)
Transition to retirement income stream
(income before retirement)
Who can invest?
If you have a superannuation benefit of at least $20,000 and you have satisfied a condition of release with no cashing restrictions, simply transfer money from your existing superannuation account to your income stream account.
If you have a superannuation benefit of at least $20,000 and you have reached your preservation age, simply transfer money from your existing superannuation account to your income stream account. Temporary Residents may be excluded.
Why would you invest?
 
  • You want flexibility in the income you receive each year.
  • You want the option of withdrawing lump sums.
  • You want to make a gradual adjustment to retirement by reducing your working hours and using a transition to retirement income stream to supplement your reduced salary.
  • You wish to continue working full time, increase your contributions to your superannuation and at the same time, draw income from your transition to retirement income stream account.
  • You want flexibility in the income you receive each year.
Tax benefits
  • No tax is payable on income stream payments after you reach age 60.
  • Where you have not reached age 60, the taxable component is taxed at your marginal rate plus Medicare levy but a 15% tax offset may be available on the taxable amount. You may also be entitled to a tax-free amount.
  • The investment earnings on assets in the Fund supporting your retirement income stream are tax free.
  • No tax is payable on income stream payments after you reach age 60.
  • Where you have not reached age 60, the taxable component is taxed at your marginal rate plus Medicare levy but a 15% tax offset may be available on the taxable amount. You may also be entitled to a tax free amount.
  • The investment earnings on assets in the Fund supporting your transition to retirement income stream are tax free.
How much can you withdraw?
  • You must withdraw a minimum percentage of your account balance every year:
The percentage varies from 3% to 10.5% for the 2012-2013 income year depending on your age.
  • There is no limit on the maximum amount you can withdraw from a retirement income stream, so you need to manage your withdrawals carefully so you do not exhaust your capital.
  • You must withdraw a minimum percentage of your account balance every year.
  • A maximum of 10% of the account balance can be withdrawn each year.
Lump sum withdrawals
You can withdraw lump sums at any time. No fee applies for partial lump sum withdrawals/rollovers. A fee of $36 applies for a full lump sum withdrawal/rollovers. 
You can only withdraw lump sums in limited circumstances before you satisfy a condition of release. When you have satisfied a condition of release, the rules for withdrawing lump sums from a retirement income stream apply to your transition to retirement income stream. A fee of $36 applies for full lump sum withdrawals/rollovers.
Frequency of payments
  • You can choose to be paid fortnightly, monthly, quarterly, half-yearly or yearly.
  • One-off withdrawals also available
  • You can choose to be paid fortnightly, monthly, quarterly, half-yearly or yearly.
Entry fee
Nil. 
Investment fee
Currently estimated to be between 0.04% to 0.64% pa. Depends on the investment option or options in which your income stream account is invested.
Administration fee
$4.33 each month (equivalent to $1 each week) plus 0.40% pa of your income stream account balance deducted monthly.
Contributions to your income stream
 
Once your income stream commences, you cannot make additional contributions to your account. You can, however, either open a second account with a minimum investment of $20,000, or invest in a separate superannuation account in First State Super (subject to meeting certain legislative conditions).*
How long will the income stream last? 
Your income stream does not have a fixed term so it will last as long as you have money in your account. 
Investment choice 
 
You can choose from twelve investment options and you can invest in more than one option at a time. If you do not make a choice, your income stream account will be invested in the Diversified option (if you are aged under 60) or in the Balanced option (if you are aged 60 or more).
Death benefits/Estate planning 
In the event of your death, your spouse can continue to receive the income stream payments or elect to commute the income stream and take a lump sum (if you nominate your spouse as a reversionary beneficiary). If you do not nominate your spouse as a reversionary beneficiary, you can make a binding (lapsing and non-lapsing) or non-binding (preferred) nomination for a dependant to receive the remainder of your income stream account.

 

*FSS Trustee Corporation is the Issuer of the Personal Division, Employer Sponsored Division and Superannuation Income Stream Division. Before making a decision about any of these products, you should consider the Product Disclosure Statement, which can be downloaded here.