People who have
benefits in a superannuation fund generally go through two phases during their
lifetimes, which have specific meanings under tax and other legislation:
The growth or accumulation phase
This is the phase
when you save money for your superannuation, either by means of your own or your
employer's contributions to the fund, generally when you are still working.
During this phase, your savings will also grow with investment earnings.
The payment phase
This is the phase
when you make use of your savings to provide income in your retirement. You can
take draw income as benefits in the form of either lump sums or pensions. Any
money in your superannuation fund which you do not use continues to attract
investment earnings, which helps to provide future benefits during your
retirement.
Of course, the distinction between the
'growth' and 'payment' phases may not be sharp and these phases may overlap for
some years. Near your retirement you may decide to work part-time for example
and not draw on your superannuation. Or your spouse may decide to draw benefits
earlier than you do.
Payment of benefits as a pension
When your 'payment' phase begins, you can choose to receive your benefit as a
lump sum or as a pension. The rules of your superannuation fund will determine
what options are available to you. If a pension is available and you choose this
option, you will remain a member of the superannuation fund for as long as the
pension is payable, and your pension will be governed by the rules of the fund.
These will determine how the pension will vary over time, when the pension
ceases, and what happens in the event of your death.
