The retirement phase (formerly called Pension phase) is the latter of two periods within superannuation – the first period being the accumulation phase, which is when a member is making active contributions to the super fund, or their employer is doing that on their behalf.
Super funds are transferred into the retirement phase when a member commences a super income stream (or pension). There is currently a cap of $1.6 million that can be transferred into the retirement phase (known as the transfer balance cap).
Fund earnings on assets transferred into the retirement phase to support the pension income stream are tax-free (and are known as exempt current pension income). Concessional contributions and fund earnings in the accumulation phase on the other hand are taxed at the rate of 15% (up to the concessional contributions cap).
The retirement phase was called the pension phase until 1 July 2017. However, the name of the phase was changed to reflect a change in the tax treatment of transition-to-retirement pensions. The earnings on assets supporting these types of pensions are not exempt from tax.
Learn more about the retirement phase in the following SuperGuide sections:
Set out below are all SuperGuide articles that relate to Retirement phase.