QUESTION: Last week you mentioned an Account-Based Pension. What is an Account-Based Pension and how does it differ from a TRIS? How do I know which is better for me? ANSWER: You may have heard of the term, “Allocated Pension”. Well, an Account-Based Pension (ABP) is the new label given to an Allocated Pension. Both Account-Based Pensions and Transition to Retirement Income Streams (TRIS) are income streams of regular payments that you take from your Super Fund (instead of cashing your Super in and investing the money to give you an income). An ABP is what you take from your Super Fund if you are over what is known as Preservation Age and have retired permanently from the work force. It can be commuted to a lump sum at any time. A TRIS is similar to an ABP except you can take it after you reach Preservation Age but have not retired. You cannot commute it until you retire. Both an ABP and a TRIS are full of tax advantages. Your accountant or financial adviser can explain the tax advantages to you. The LawCentral Pension Pack (created in conjunction with Self Fund) allows for both an Account-Based Pension and a Transition to Retirement Income Stream. The Pension Pack contains the following: 1. Application form for the members to hand to the trustees; 2. SIS Regulation complying Trustee Minutes agreeing to pay the pension; 3. Application to commence form (These set out all the rules for your Pension payment); and 4. Product disclosure statement, which follows best practice …
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