Term Pension

For more details, refer to the Catholic Super Pension Product Disclosure Statement.

What is a Term Pension?

A Term Pension is an investment product that provides regular income from a lump sum investment.

Perhaps it is easier to understand if you think of it as your Catholic Super superannuation in reverse. Over your working life, regular contributions have been paid into Catholic Super on your behalf. And now in retirement, your account is converted into a pension from which Catholic Super pays you a regular income.

The regular income you receive from a Term Pension is restricted to a set amount of your
account balance. Also, access to your investment is restricted, that is, it generally cannot be cashed in.

How Long Will My Income Last?

When you commence a Term Pension you select a term that is broadly based on your life expectancy and is designed to generally last that term.

It will not provide a guaranteed regular income for the term selected as the amount of income you receive each year can rise or fall depending on the value of the investments you have chosen.

What Are The Advantages?

The main advantages of a Term Pension are:

• a favourably taxed and regular income for a set term
• 50% asset test exemption for the Age Pension Means Test
• control over the frequency of your income payments
• control over the way your money is invested.

What Are The Risks?

The main risks are:

• there is no guarantee your investment will last for the rest of your life
• access to your investment is restricted
• the amount of income you can receive each year can rise or fall depending on the value of the investments you have chosen
• in some cases, we may delay pension payments or investment switches
• laws affecting this product may change
• investment performance is not guaranteed.

What Can You Invest?

You can only invest using existing (and accessible) superannuation monies or by:

• making a contribution to Catholic Super
• by transferring in monies from another fund.

Please note that once your Pension has commenced, you cannot make additional investments into it. If you want to make additional investments, you will have to establish a new Term Pension.

Why Should I Choose the Catholic Super Term Pension?

• a range of investment options, including your choice of ‘build your own’ investment options managed by leading Investment Managers
• tax free investment earnings
• no lump sum tax on rollover or transfer
• part of each pension payment may be tax free and the rest may attract a 15% tax offset
• flexibility in how often you get paid
• low fees

Your Investment

The lump sum amount you pay or rollover (transfer) into your Term Pension is called an investment.

When you make this investment you can choose to invest it in one or a  combination of investment options. Your money is invested by the Trustee in the selected option(s) on your behalf. Your account is made up of amounts paid (including any amounts transferred from another superannuation or rollover fund) and any investment income (whether it be positive or negative), minus expenses and any Government duties or taxes. We then pay you a regular income by drawing an amount against the value of your investment.

Investment Options

You can choose the investment style and level of risk you are most comfortable with and that is most suitable for you. Member investment choice allows you to exercise this choice. You have a choice of ten investment portfolios, comprising five Managed Choice options and five Build Your Own options.

If you do not make a choice, your existing investment option selection under the Catholic Super membership will remain in place until such time that a new investment choice is made.

More information on the investment options can be found in the Investment section of this website and the Catholic Super Pensions Product Disclosure Statement.

Choice of Income Payments

You choose how often you want the Pension to be paid – twice-monthly, monthly, quarterly, half yearly or yearly. You can ask us to change the frequency of your pension payments at any time - we will adjust such income payments to ensure they remain in line with the annual allowable income for that financial year.

Term

When you commence a Catholic Super Term Pension you select a term which is broadly based on your life expectancy. The choice of terms that are available to you depend on the beneficiary option that you choose.

Where no Reversionary Beneficiary Exists

The term you can select will range between your life expectancy at the time your Pension commences up to your life expectancy if you were 5 years younger.

 

Where You Have Nominated Your Spouse as a Reversionary Beneficiary

The term you can select will range between the longer of your own and your spouse’s life expectancies at the time your Pension commences, up to the longer of your own and your spouse’s life expectancies if you were both 5 years younger.

Access to Your Investment

Access to your investment is restricted, that is it generally cannot be cashed in, except in limited circumstances. These include:

• within six months of commencement
• if transferred directly to another complying income stream
• on death
• to meet a family law payment split.

How Much Income Can You Receive?

The amount of income is calculated at the date you invest and each 1 July thereafter, and applies for the rest of that financial year. The amount of income remains the same regardless of changes to the value of your Term Pension Account Balance during the year.

Your Pension will not provide a guaranteed amount of regular income for the term you select. The amount you receive each year can rise or fall depending on the value of the investments you have chosen.

Investing After 1 June

If you invest in the Term Pension between 1 June and 30 June inclusive, there is no minimum amount of income you must receive for that financial year.

When Do You Receive Income?

You receive your income payments by electronic funds transfer to your bank, building society or credit union account.

Payments are processed in arrears on or prior to the 28th day of each month (twice-monthly payments are processed on or prior to the 14th and 28th day of each month).

You have a choice to receive your payments twice-monthly, monthly, quarterly, half-yearly or yearly.

What Investment Option Will My Pension Payment Be Drawn From?

If you select two or more investment options, your pension payment can be drawn in one of the following ways:

• in the same proportion as your investment choice for your Account Balance, or
• you can elect to drawdown your pension payment from one of the investment options you have selected.

How Does Tax Affect My Pension Payments?

Term pensions receive special concessional tax treatment.

We strongly recommend that you read the Catholic Super Pensions Product Disclosure Statement and speak to your financial planner or taxation adviser to discuss these concessions and your own circumstances.

What Happens if You Die?

If you die while you are a member of the Catholic Super Term Pension, we will pay a death benefit.

A death benefit is equal to your Account Balance at the time of death. This means that on death, the balance of your Term Pension account will be paid to your estate as a lump sum unless you have selected a reversionary death benefit nomination.

Fees and Charges

The initial and ongoing fees and charges can be found.at: Fees and charges of the Catholic Super Term Pension.

More Information

Full details about Catholic Super's Term Pension product can be found in the Catholic Super Pensions Product Disclosure Statement or you can contact the Fund.