MemberOnline     

members

members
Print page

Indexed pension

What is an indexed pension?

An indexed pension gives you the security of a regular monthly income, indexed to the Consumer Price Index (CPI), for the rest of your life without the hassle of managing your own investments.

UniSuper offers two styles of indexed pension:

Read more about how an indexed pension is calculated and paid as well as how to apply for an indexed pension.

Commercial Rate Indexed Pension

 There are two types of Commercial Rate Indexed Pensions:

  • Single Life; and
  • Joint Life.

Both are the same in terms of:

  • the minimum investment required
  • payment frequency
  • indexation in line with Consumer Price Index (CPI) on 1 July each year
  • fees and costs, and
  • a guaranteed 10-year minimum payment period.

The key difference is what happens to your pension in the event of your death.

With a Joint Life indexed pension the reversionary pension for your nominated spouse will be 100% of the pension you receive. In the event of your death, your nominated spouse will receive the chosen pension amount for as long as they live.

With a Single Life indexed pension, no reversionary pension is payable in the event of your death. Commercial Rate Indexed Pensions and the annual pension income (less an exempt amount) count towards the Centrelink and Department of Veterans’ Affairs assets and income test. 

What is the minimum investment for a Commercial Rate Indexed Pension?

A Commercial Rate Indexed Pension requires a minimum investment of $25,000.

You can use all or part of your UniSuper benefit and roll over any amounts you may have in other super funds into your UniSuper super account before the pension is commenced.

Once you have started your Commercial Rate Indexed Pension, you cannot contribute additional amounts into the pension. You can however, apply for another Commercial Rate Indexed Pension if you have a further $25,000 or more to invest.

How does the Commercial Rate Indexed Pension's 10-year guarantee work?

Joint Life:

  • If you die within the guarantee period your nominated spouse will receive 100% of your pension for the remainder of their life
  • If your nominated spouse is receiving the reversionary pension (after your death), and dies within 10 years of you starting your pension, the residual amount will be paid to your nominated spouse’s estate as a lump sum benefit.

Single Life:

  • If you die within the guarantee period, the residual amount will be paid to your estate as a lump sum. However, if you die after the guarantee period has elapsed, no residual benefit is payable.  

Defined Benefit Indexed Pension

A Defined Benefit Indexed Pension is only available to Defined Benefit Division members who joined the Fund before 1 July 1998.

A Defined Benefit Indexed Pension provides a 62.5% reversionary pension for your surviving spouse. Additional benefits may also be available for any dependent or disabled children in the event of your death.

There is no guaranteed 10-year minimum payment period.

The pension is 100% exempt from the Centrelink/Department of Veterans’ Affairs assets test. The annual pension payments (less an exempt amount) count towards the income test.

What is the minimum investment for a Defined Benefit Indexed Pension?

There is no minimum investment required for a Defined Benefit Indexed Pension.

You can use all or part of your defined benefit component to commence a Defined Benefit Indexed Pension.

Once you have started your Defined Benefit Indexed Pension, you cannot contribute additional amounts into the pension.

How is the indexed pension calculated and paid?

Commercial Rate Indexed Pension

Your annual pension is calculated by reference to a mix of government bond rates. UniSuper then adds 0.5% to this rate to give you a better value pension.

Defined Benefit Indexed Pension

Your annual pension income is calculated using a formula set out in the UniSuper Trust Deed. Please see additional important information regarding DBD Pensions.

Payments from UniSuper indexed pensions are made monthly.

Except in very limited circumstances, you cannot make a lump sum withdrawal from an indexed pension. Refer to the Your guide to pensions product disclosure statement (PDS) for more details.

How do I apply for an indexed pension?

To apply for a UniSuper indexed pension, simply complete and return:

Tell me moretell me more