
Account-Based Pensions: a smart choice for a regular retirement income
An account-based pension (ABP) is a retirement income option for members who have stopped working and are eligible to access their super. It's a way to receive a regular, flexible and tax-effective income from super after reaching preservation age. It's important to remember that an ABP provides income as long as your super funds last, but it's not a guaranteed income for life.

How an Account-Based Pension works
An Account-Based Pension, also known as an Allocated Pension, is available for members at preservation age. It's a tax-efficient way to continue to grow your super and having a regular income stream in retirement.
You can control withdrawal amounts and frequency within certain limits to tailor it to your retirement income needs, as well as retain the ability to take lump sum withdrawals if necessary. You can also choose from various investment options so your investment strategy always aligns with your risk tolerance and investment goals. This pension plan is also tax-free for members over 60.
Regular payments and flexible withdrawals
With the flexibility of regular payments, you can choose how much and how often you receive them. You can also adjust these payments yearly to suit your financial situation. Additionally, you have the option for flexible withdrawals, enabling you to access lump sums as needed. This flexibility makes it easier to manage your finances in retirement, providing both regular income and the ability to withdraw additional funds when required.
An income stream with tax benefits
An account-based pension is a tax-effective way to use your superannuation. If you are aged 60 or above, you won't pay tax on pension payments. For those aged 55 to 59, the taxable part of the pension is taxed at your marginal tax rate, but you benefit from a 15% tax offset. It's a practical option for both managing retirement income and tax planning.
Account-Based Pension key features
Minimum investment amount |
$20,000 |
Payment frequency |
Twice monthly, monthly, quarterly, half-yearly or yearly. |
Payment amount |
You can choose any income amount, there are no limits. |
Investment options |
There are 10 investment options available, including a self-managed option, the Direct Investment option. |
Lump sum withdrawals |
You can make lump sum withdrawals from your legalsuper account at any time. This is also known as a 'commutation'. Tax will be deducted from the lump sum accordingly if you are under age 60. Over age 60 there is no tax payable on lump sum withdrawals. More info can be found on the ATO page. |
Account closure |
You can roll back your retirement pension account in to your regular super account at any time, or you can withdraw the full value to close your account. You are not locked into a Retirement Pension account for any defined term. |
Account Based Pension Minimum Withdrawal rates
Some superannuation pensions and annuities must follow rules that set the minimum and maximum payments required each financial year.
From 1 July(each year), your annual pension payments must be at least the minimum limit set by the Federal Government. Your age, annual pension account balance, and the Government's minimum payment percentage determine the limit that applies to your situation.
The table below shows the Government's minimum percentage factor for certain pensions and annuities (indicative only) for each age group.
Setting up an Account-Based Pension
Here's what you need to know:
- Simple process: Starting your pension account is user-friendly and quick, simply complete the Pension membership application form within the Pension Product Disclosure Statement.
- Certified ID: You will also need to supply certified ID with your application form.
- Flexibility post setup: After establishing your pension account, you can make changes whenever necessary.
- A cooling-off period of 14 days lets you reconsider your decision without immediate consequences.
- If you're transferring funds from another fund, you may also need to complete a 'Rollover request' form. We can help you navigate this process.
Fees & costs of an Account based pension
We work hard to keep fees and costs low. Our sole purpose is to maximise our members' retirement savings. We do not pay commissions to agents and are a profit-to-member fund. Find out more about our Account-Based Pension fees and costs below.
Want more flexibility? Try a Transition to Retirement (TTR) Account
This account lets you access retirement savings while still employed, as long as you've reached preservation age. Once you turn 60, the benefits are tax-free. With a TTR, you can gradually reduce working hours while increasing retirement savings.
Frequently Asked Questions - Account-Based Pension
Yes, you can receive an account-based pension while continuing to work. However, this depends on the superannuation rules and your preservation age. If you have reached your preservation age but are under 65, you may be eligible for a Transition to Retirement (TTR) pension, which allows you to draw an income from your super while still working.
Once you turn 65 or meet a condition of release, you can access a full account-based pension without restrictions, even if you continue working. However, it’s essential to consider how this affects your tax obligations and government benefits.
Yes, you can have multiple account-based pensions. You may choose to set up different pensions from separate superannuation accounts or start a new pension with additional contributions. Having multiple pensions can offer tax and estate planning benefits, but it’s important to review fees, income streams, and Centrelink implications before doing so.
No, once started, you cannot add funds to an account-based pension. To contribute more, you must transfer the balance back to a super accumulation account, add funds, and then start a new pension.
Please note, this may have tax implications, affect Centrelink benefits, and restrict access until a new condition of release is met, so professional advice is recommended.
Yes, but you must first transfer it to a super accumulation account. From there, you can switch providers or add funds before starting a new pension. This may affect taxes and Centrelink benefits, so you may want to seek professional advice.
An Account-Based Pension lets you access your super as regular income in retirement while still growing your savings. You control withdrawals, can take lump sums if needed, and choose investments to match your goals. It’s tax-free if you’re over 60 and can supplement other income like the Age Pension.
If you are aged 60 or above, you won't pay tax on pension payments. For those aged 55 to 59, the taxable part of the pension is taxed at your marginal tax rate, but you benefit from a 15% tax offset.
Any earnings within the pension phase are tax-free, making account-based pensions a tax-effective way to access retirement savings.
If you pass away, your remaining super balance goes to your dependant beneficiary/ies or estate.
You become eligible for one upon reaching your preservation age (between 55 and 60, depending on your birth year). It’s important to note that a Transition to Retirement (TTR) pension is a type of account-based pension too.
