Understanding your options when you can take your DB benefits

Today, most Australians become members of an accumulation fund when they start their first job. But back in the 90s and earlier, your employer may have started a defined benefit (DB) for you.

The Vision Super Defined Benefit plan has been closed to new members since 31 December 1993 and you may be wondering what you can do with your money – especially since a lot of information online is steered towards accumulation accounts.

The amount of your benefit depends on the reason why you left your employment. This may also impact on the choices you can make about the payment of your defined benefit. So how are you entitled to receive your benefit?

Retirement benefits

Retirement benefits are payable when you terminate employment for non-medical reasons at or after age 55 (eg you are 59 years old and resign from your employment).

There are a number of options available to you depending on the date you joined the fund:

1. If you’re under the age of 55, you may transfer some/all of your DB retirement benefit to a Deferred retirement benefit within DB plan
2. Transfer some/all of your DB retirement benefit to another Vision Super product or to another superannuation fund
3. Take some/all of your DB retirement benefit in cash (some conditions apply, such as preservation rules, so make sure you speak to a professional first)
4. Start a DB lifetime pension with up to 50% of your DB retirement benefit (if you are eligible to take a DB lifetime benefit).

If you joined the Fund before 25 May 1988 and you retire at or after age 55, you can convert up to 50% of your DB retirement benefit to a DB lifetime pension (we cover this in more detail below).

Resignation or retrenchment benefits

If you are under age 55 and leave your employer through either resignation or retrenchment, you may be eligible for a resignation or retrenchment payment. Contact us on 1300 300 820 for more information.

Disability, ill health or terminal illness benefit

If you are forced to retire or cannot continue employment due to a disability, serious illness or injury, your DB account may pay out a benefit. Contact us on 1300 300 820 for more information.

Deferred retirement benefit

Accessing your Deferred retirement benefit

Your Deferred retirement benefit is not payable before you turn 55. You can access it from age 55 subject to the preservation rules. Your Deferred retirement benefit can be paid in the following circumstances:

1. When you reach your preservation age – a Deferred retirement benefit is payable when you reach age 55. From age 55, your Deferred retirement benefit can be transferred to another Vision Super product or to another fund. In some circumstances and if you’re eligible, at age 55 and regardless of preservation age/rules, you may be entitled to a DB lifetime pension. If you have not met your preservation age, you are only able to access any unrestricted non preserved benefit you may have.
2. If you are totally and permanently disabled – a disability benefit can be paid subject to Trustee approval and is generally equal to your account balance.
3. If you die – in the event of your death, your account balance is payable to your legal personal representative.

If you joined the Fund before 25 May 1988, you are eligible to take a DB lifetime pension on either voluntary retirement at or after age 55, or total and permanent disability.

Eligibility for the DB lifetime pension

You are eligible to convert up to 50% of your lump sum benefit from the DB plan or eligible Deferred retirement account to a DB lifetime pension if all of the following apply:

1. You are a member of the DB plan or DB Deferred benefit arrangement
2. Your DB plan membership started on or before 25 May 1988, and
3. You ceased your DB plan or Deferred retirement membership at or after age 55, or on account of approved total and permanent disability.

Benefits in your additional benefit contract (ABC) account, Vision Super Saver or Vision Personal account cannot be converted to a DB lifetime pension.

How does the DB lifetime pension work?

If you have a DB lifetime pension, you will be paid a regular fortnightly amount throughout your life, and, if you die before your spouse, it will be paid at a reduced rate (normally two-thirds) to your spouse for the rest of their life.

City of Melbourne (CoM) and Parks Victoria DB memberships

If you currently hold a CoM or Parks DB account, the way your benefit is calculated, and the way you can withdraw from your account is different. Every DB is unique so make sure you talk to us before you make any decisions.

Vision Super financial advice

Vision Super Financial Planners are superannuation and DB specialists and understand the intricacies of the Vision Super DB benefit and what choices are available to you. Their job is to help members plan for their retirement. If you choose to obtain advice from a Vision Super Financial Planner, you may be charged a fee. If any fees are applicable, this will be discussed with you before any financial advice is provided. Call our Member Services team on 1300 300 820 Monday to Friday 8:30am to 5pm to set up a time.