Indexed pension

Is an Indexed Pension right for you? Find out more about these retirement options.

What is an Indexed Pension?

An Indexed Pension gives you a regular income, indexed to inflation, for the rest of your life. So as inflation increases, so does your pension income. You also can choose a reversionary Indexed Pension ('Joint Life Pension') which means your spouse receives a pension if you die before them.

To finance your pension, you can use all or part of your UniSuper benefit plus you can roll over any super you may have in other funds.

While you cannot close or make withdrawals from your account, there is a guaranteed 10-year minimum payment period for pensions based on commercial rates.

Two styles of Indexed Pension to choose from

UniSuper offers two styles of Indexed Pension, based either on:

• commercial rates or
• Trust Deed factors (for eligible members)

Both pensions can be used to Transition to retirement.

Commercial rate Indexed Pension

You may use your super benefit to purchase a pension based on commercial market rates. You need a minimum amount of $25,000 to invest.

This type of Indexed Pension has a guaranteed 10-year minimum payment period, and you can select either a:

• Single Life Indexed Pension or
• Joint Life Indexed Pension

The key difference between these pensions is that with a Single Life Pension no pension is payable to your spouse or estate when you die. With a Joint Life Indexed Pension you can choose a 62.5% or 100% reversionary benefit for your spouse. This means if you die they continue to receive a pension for as long as they live.

How the ten-year guarantee works

Here's what will happen if you die within ten years of starting your commercial rate Indexed Pension.

• If you have a Single Life Indexed Pension or you do not have a spouse, an amount will be paid as a lump sum to your beneficiaries.
• If you have chosen a 100% reversionary amount, your spouse will receive 100% of your pension for the remainder of their life.
• If you have chosen a 62.5% reversionary amount, your spouse will receive 100% of your pension until the ten-year period expires. After this time they will receive 62.5% of your pension for the remainder of their life.

If your spouse is receiving a reversionary pension and dies within 10 years of when you started your pension, an amount will be paid as a lump sum to your beneficiaries.

Indexed Pension based on Trust Deed factors

An Indexed Pension based on UniSuper Trust Deed factors is only available for those who became Defined Benefit Division members before 1 July 1998. This pension is 100% exempt from the Centrelink assets test and it provides a 62.5% reversionary pension for your spouse. You do not need a minimum initial deposit, but there is no guaranteed 10-year payment period.

Additional benefits may be available for a surviving spouse and or dependent children.

How your Indexed Pension is paid

Pension payments are deposited directly into your nominated account on the 28th day of each month. Your first payment will include a pro-rata amount covering the period between your retirement date and the end of the first payment month.

How your Indexed Pension is calculated

• Commercial Rate Indexed Pension
  The amount of income paid is based on a mix of government bond rates. We then add 0.5% on top of this to give you a better value pension.
• Indexed Pension based on Trust Deed factors
  Your pension payments will be calculated according to a formula which generally provides a higher pension than commercial market rates.  Please see additional important information regarding DBD Pensions.

Applying for an Indexed Pension

To apply for a UniSuper Indexed Pension:

1. Tell us when you plan to retire and we'll send you a Retirement Kit, which includes a Benefit Entitlement Statement showing the total value of your benefit and your payment options.
2. Complete your Benefit Instructions form, together with
3. An Indexed Pension application form,
4. a Rollover form if you wish to rollover any benefits into your pension account from other funds, and
5. if you are under 60, a Tax file number collection form
6. Return all of these to UniSuper

Fees

The administration fee is very competitive and there are no entry or exit fees.