• What types of pensions does the Pension Pack cater for?
• How does the pension commence?
• Does the Pension Pack cater for segregating assets used to fund the pension?
• Do I need an actuarial certificate?
• Can I add assets to the assets which are funding my pension?
• What happens to my transition to retirement pension when I retire?

What types of pensions does the Pension Pack cater for?

The pension pack caters only for simple pensions (also known as "accounts-based pensions".).

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How does the pension commence?

Simple pension - the first pension payment may be made in advance or in arrears, If:

1. It is made in advance then the pension commences on the date the first payment is made; and
2. It is made in arrears then the 'commencement day' is the first day of the period to which the first pension payment relates: that is, if the first pension payment is to be made six months in arrears, then the 'commencement day' would be 1 July 2007 and the first pension payment would have to be made on 31 December 2007.

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Does the Pension Pack cater for segregating assets used to fund the pension?

The pension pack does not prohibit segregating assets, but this is a matter which the trustee and member must agree between themselves, and in accordance with the relevant fund's trust deed.

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Do I need an actuarial certificate?

Click here to read the ATO's fact sheet on this topic.

Basically, if the assets are segregated, then no actuarial certificate is needed (provided the fund is not paying any pension other than a market-linked pension or simple pension). If the assets are unsegregated, then an actuarial certificate is required.

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Can I add assets to the assets which are funding my pension?

No. No additional capital contributions can be made to the assets funding the pension. Only interest and earnings on the current assets being used to fund the pension can be added to the assets funding the pension.

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What happens to my transition to retirement pension when I retire?

With market-linked pensions, nothing changes except that some additional restrictions on commuting the pension are lifted.

With simple pensions, the position is a little unclear. The additional restriction on transition to retirement simple pensions is that there is a maximum amount that can be paid each year - there's no maximum for a normal simple pension. When you retire, unfortunately the legislation does not (at the moment) automatically lift this 'maximum limit'. It may be necessary to commute the pension and start a new normal simple pension.

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