Term Allocated Pensions

This type of pension enables retirees to enjoy potentially higher investment returns than previously available from traditional 'complying' pension products.

Term allocated pensions can only be purchased with super money and like allocated pensions, retirees may choose the underlying investment (and therefore influence the expected return). Unlike allocated pensions, access to capital is not allowed.

Unlike allocated pensions, access to capital is not allowed. The movements in the account balance may lead to fluctuating income payments. Retirees receive a gradual draw-down of capital and investment earning over the duration of the income stream.

Upon death, the remaining account balance is payable to beneficiaries.

Term allocated pensions qualify as a 'complying' pension, so only 50% of the account balance is asset-tested by Centrelink when assessing your eligibility for the age pension (if purchased before 20 September 2007). They are also treated favourably for the income test.

Term Allocated Pensions will no longer be available from 20 September 2007.