Australia: Calculator launched for Transition to Retirement
22 December, 2005
Navigator today launched a new calculator to assist financial advisers in showing potential outcomes of Transition to Retirement strategies to their clients.
This follows the Australian Taxation Office’s clarification that investors using the transition to retirement strategy in a straight forward way to draw down a superannuation pension while continuing to contribute to their superannuation, are unlikely to be breaching anti-tax avoidance rules[1].
The new Transition to Retirement calculator can be accessed on the Navigator web site at www.navigator.com.au
Available since 1 July this year through Navigator, Transition to Retirement has proven popular with clients looking to have access to their superannuation as an income source, but still wishing to continue working in some capacity and topping up their retirement savings when they can.
The Transition to Retirement rules extend the lifestyle benefits for workers aged 55 or over by allowing them to draw down their superannuation as they reduce their working hours. Alternatively, for those who continue working a Transition to Retirement pension can allow them to maintain their disposable income, while significantly increasing superannuation contributions to improve their post-retirement income.
Until recently, there has been some concern that clients looking to receive a superannuation pension and continue making salary sacrifice contributions may in fact have some taxation issues.
According to Navigator’s Group Director Products, Marketing and Public Affairs, Rob Donaghy, the comments made earlier this month by the Commissioner for Taxation, Michael Carmody, are very positive for the industry as a whole, as there were many financial advisers waiting for clarification before their clients take advantage of the new strategy.
“The ATO’s statement should now have cleared the air. Navigator has been strongly supporting the transition to retirement strategy and the flexibility it provides,” says Rob.
“As one of the first providers to offer access to this initiative we have found we are attracting a great deal of interest – not only from those who traditionally deal with Navigator, but also from other platforms that do not yet offer their customers this facility.”
The Transition to Retirement calculator is based on the current pension provisions and will be updated immediately when the new pension rules come into effect.
1. Australian Taxation Office, Media Release: Guidance on transition to retirement pensions, November 2005, Canberra.
-ends-
For further information please
contact:
Simon Morgan
Group General Manager Public Affairs
Phone: (03) 9829 8892
Mobile: 0407 966 632
Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world's sixth largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$78.6 billion, and more than A$645 billion of assets under management (as at 7July 2005). The group has more than 60,000 employees and 30 million customers worldwide.
- The information in this document reflects Navigator Australia Limited's ('Navigator') ABN 45 006 302 987 understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. A PDS is available from NULIS or your financial adviser. Applications to invest in investment product(s) through the investor directed portfolio service ("IDPS"), operated by Navigator, must be made by completing the application form attached to the applicable IDPS Guide Offer Document and Investment Allocation Authority. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.
