This type of
pension is based on your account balance, which you specify at the time the
pension starts. The account is accumulated with investment earnings from time to
time. Each year you must draw a pension payment from your account between
certain minimum and maximum values, depending on your age and your account
balance at the start of each year.
The features of this type of pension are:
It is flexible -
you decide each year how much pension to draw between the minimum and maximum
values. You can also add to your account balance from time to time, or
terminate it altogether (known as 'commuting' the pension)
It is simple -
you draw income from your account until it is exhausted. However, if you draw
income too quickly, the pension may have to cease earlier than you expect!
The balance of your account may be paid to your nominated beneficiaries when you
die.
The pension may be terminated ('commuted') at any time in favour of a lump sum benefit.
