How does an allocated pension work?
The main advantage of an Allocated Pension is its flexibility. You choose the amount of income you wish to receive each year, subject to the minimum amounts shown below. These new amounts apply to allocated pensions starting from 1 July 2007.
| Age |
Minimum Annual Withdrawal
(as a % of your account balance) |
| 55-64 |
4% |
| 65-74 |
5%
|
| 75-79 |
6% |
| 80-84 |
7% |
| 85-89 |
9% |
| 90-94 |
11% |
| 95 or more |
14% |
The above are minimum amounts. You could take up to 100% of your account balance in any one year if you wanted to.
Allocated Pension example
A 60-year-old retiree with $200,000 invested in an allocated pension can receive a pension for any amount from $8,000 ($200,000 X 4%) in the 2007/08 financial year. Naturally, the more income you receive the quicker your capital will be exhausted.
You can control the frequency of your income payments and can access lump sum amounts on top of your regular income payments at any time.
For individuals over 60 years of age, all pensions and lump sums taken from an allocated pension are tax-free. If you are between 55-59 years of age, the pension payment comes with a 15% tax rebate on the taxable portion and your taxed component will be paid tax-free up to the low-rate threshold of $140K.
With an allocated pension you are in control, you can decide how the funds are invested and nominate which investment option you want the funds to be withdrawn from.
Find out more about how to sign up for a Vision Super Allocated Pension. 
