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Pension schemes

What is a pension?

A pension is a regular income payment. It can be a way to meet your income needs when you retire. 

A pension can come from a number of sources. It can be: 

  • paid by the Government in the form of social security such as the Age Pension to those who may need assistance to meet their income needs
  • a defined benefit pension from your super fund
  • an account-based pension from your super savings
  • income drawn from other retirement savings 

Once you retire, you can roll over any super lump sum into a retirement income stream. This is the most tax-effective way to draw down your super as a source of retirement income. Typically, retirement income products are either an account-based pension or an annuity. 

What kind of pension do I need?

The pension most appropriate for you will depend on your circumstances.

In a defined benefit scheme your final benefit is worked out by a set formula. It is partly funded by your employer, and partly funded by your personal contributions. The amount paid can be based on a combination of factors such as your salary, age and years of service with that employer.

Examples of defined benefit plans are:

  • Commonwealth Superannuation Scheme (CSS)
  • State Superannuation Scheme (SSS)
  • Police Superannuation Scheme (PSS)

An accumulation super fund is where your employer makes regular, guaranteed super contributions on your behalf. You can also make contributions to boost your retirement savings. 

What’s the difference between defined benefit and accumulation plans?

A defined benefit is backed by your employer. But it depends on a set formula and, usually, whether or not you make contributions.

In an accumulation super fund, you have control over what you invest in but your benefit is subject to the ups and downs of the investment market. 

That’s why it’s so important to speak to a retirement planning expert and get advice on all the different strategies for securing your retirement savings. 

Why should I talk to StatePlus?  

At StatePlus we’re experts in pensions and retirement income.

We’ve been providing advice on this for a quarter of a century and are one of the largest managers of account-based pension products in the country. Our planners can help you structure your personal savings and manage your pensions so you receive your full benefit entitlements. 

Call 1800 620 305 and speak to our experts today. There’s no cost or obligation to see a planner. The fee you pay will reflect the advice you actually need and the level of service that you want.


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