What is the Retirement Bonus?
The Retirement Bonus (also known as the Pension Bonus Scheme) is a payment that legalsuper at its discretion may make to you when you open a legalsuper Pension account. While you are paying into your Super account, legalsuper sets aside money to pay for any capital gains tax that you might be liable for when legalsuper sells assets invested on your behalf that have made a profit. When you transfer to a Pension account no capital gains tax is payable. So if you have accrued that saving, it can be passed on to you in the form of the Retirement Bonus.
You may be eligible for the Retirement Bonus payment if:
- You have held a legalsuper Superannuation and/or a legalsuper Transition to Retirement account for at least 12 months prior to opening a Pension account.
- You are invested in any investment option except Cash. Partial or full investments in Cash will affect how much, if any, Retirement Bonus can be paid to you.
- You have not previously received a Retirement Bonus.
Do I need to apply for the Retirement Bonus?
No, the Retirement Bonus will be calculated based on the length of your membership, the amount of your investment and which option/s your money is invested in. This amount will be paid directly to your Pension account when you open it.
How much Retirement Bonus will I receive?
Every member will receive a different amount, based on their individual circumstances. Factors such as the amount you have invested, your investment history over the preceding 12 months, the option/s you were invested in and any investment switches you made during that time will be included in the calculation for your payment.
You can obtain a Retirement Bonus estimated quote by logging in to your MemberAccess. The quotes are indicative, the exact amount paid to you may differ from the quote.
The Trustee reserves the right to stop the Retirement Bonus and change how it is calculated and applied or other terms and conditions of the Retirement Bonus at any time and without notice.
How is the Retirement Bonus paid?
If eligible, the Retirement Bonus will be paid into your new Pension account. It will be listed as a transaction which you can see via your account online. We will also confirm the payment in the Pension Welcome Pack which new members receive in the mail.
Is there a clawback period?
A clawback period for the Retirement Bonus is currently not implemented.
Is there any reason why I wouldn’t receive the Retirement Bonus?
Yes. Not everyone is entitled to a Retirement Bonus. These reasons include:
- Transition to Retirement phase
If you open a Transition to Retirement Pension account, you will not be eligible to receive the payment. These accounts are not eligible as they are not tax-free accounts. However, when you exit this phase and enter the full Pension phase, you may be eligible if you meet the other eligibility criteria.
- You were invested in the Cash option in the previous 12 months
If you are fully or partially invested in the Cash investment option, you may receive a reduced amount or no Retirement Bonus payment at all, as this option does not attract capital gains tax.
- You have previously received the Retirement Bonus
If you have previously received the Retirement Bonus, you will not receive another payment.
- Market conditions
Some investment options may record a loss and may not pay a Retirement Bonus as a result. Additionally, during extreme market volatility, legalsuper may reduce or remove the Retirement Bonus without providing notice.
Is there any other information I should know about?
Some additional factors you need to be aware of are:
- Transfer Balance cap
Your Retirement Bonus will count towards the transfer balance cap of $1.9 million applicable from 1 July 2023. A number of conditions apply to Transfer Balance caps which are specified by the ATO; please refer the PDS for more details or to the ATO website.
- Contributions tax
Contributions tax is not payable on the Retirement Bonus amount.
- Future legislative changes
Any future legislative change that may come into effect and impacts the tax treatment or other conditions of the Retirement Bonus may result in payments being stopped by legalsuper.