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Calculating your minimum pension payment

What is the minimum pension payment?

If you have a Rest Pension account, there’s a minimum amount you need to receive in pension payments from your account each financial year. This amount is called your minimum annual pension payment.

It’s based on your age and calculated using a percent that’s set by the government. This is called your minimum pension payment rate.

When you open your Rest Pension account, your minimum annual pension payment for the first financial year uses your age and account balance on the day your account starts. For future financial years, it uses your age and account balance on 1 July.

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View your minimum annual pension payment amount on MemberAccess. It’s recalculated on 1 July each year.

You can also use MemberAccess to change the amount if you want to. Simply log in and then select ‘Update my pension payment’.

Log in to MemberAccess

Minimum pension payment rates

This is the percent of your account balance that’s used to calculate your minimum annual pension payment amount. 

Your age on the day your Rest Pension starts or on 1 July Minimum pension payment rate
Younger than 65 4%
65-74 5%
75-79 6%
80-84 7%
85-89 9%
90-94 11%
95 or older 14%
Example 1: Calculating the minimum annual pension payment at 1 July
Account balance at 1 July $200,000
Age 67
Minimum pension payment rate 5%
Minimum annual pension payment^

Multiply the account balance by the minimum pension payment rate:

$200,000 x 0.05

Minimum annual pension payment = $10,000
Monthly pension payment*

Divide the minimum annual pension payment by the number of months in a year:

$10,000 / 12

Monthly pension payment = $833

Example 2: Calculating a minimum annual pension payment when opening an account part way through the financial year

Unless you open your Rest Pension account on 1 July, your minimum annual pension payment for your first financial year will be pro-rated. This means it will be based on the number of days remaining in the financial year.

Let’s see how this works using the same details as the previous example, but with the account starting on 1 March.
Opening account balance $200,000
Age 67
Minimum pension payment rate 5%
Account open date 1 March
Days remaining in financial year 1 March to 30 June (inclusive) = 122 days
Minimum annual pension payment^

Step 1. Multiply the account balance by the minimum pension payment rate:

$200,000 x 0.05 = $10,000

Step 2. Divide the days remaining in the financial year by the total number of days in a year:

122 / 365 = 0.334 (to three decimal places)

Step 3. Multiply these two numbers together:

$10,000 x 0.334 = $3,340 (rounded to nearest $10)

Minimum annual pension payment = $3,340
Monthly pension payment*

Divide the minimum annual pension payment by the number of payments left in the financial year.

In this example, there will be four monthly payments this financial year (March, April, May and June):

$3,340 / 4 = $835

Monthly pension payment = $835

Your minimum annual pension payments will be recalculated on 1 July each year.  

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What if my pension starts in June?

If your Rest Pension starts in June, there is no minimum annual pension payment. You have two options:

  1. Delay your first payment until July (see example 1).
  2. Nominate how much you want to receive and get your first payment in June (only available if your application is processed by 15 June).

What is the maximum amount I can take?

While you have to take out at least the minimum annual pension payment amount, you can choose to take out more.

If you have a Rest Pension Retirement account, there’s no maximum. You can take out as much as you like, however it’s important to consider how your payments will impact your retirement savings over time.

Use our Retirement Budget Calculator to check how much you need. You also have the option to make lump sum withdrawals if you need to. These withdrawals don’t count towards your minimum annual pension payment.

Maximum pension payments for a Rest Pension Transition to Retirement account

If you have a Rest Pension Transition to Retirement account, the maximum you can receive is 10% of your account balance each financial year. If you choose this option, you’ll receive the full maximum annual pension payment even if you open your account part way through the year. The maximum amount will be split evenly across your payments for the remainder of the financial year. 

Example 3: Calculating minimum and maximum pension payments for a Transition to Retirement account
Account balance $200,000
Age 60
Minimum pension payment rate 4%
Account open date 1 March
Days remaining in financial year 1 March to 30 June (inclusive) = 122 days
Minimum annual pension payment^

Step 1. Multiply the account balance by the minimum pension payment rate:

$200,000 x 0.04 = $8,000

Step 2. Divide the days remaining in the financial year by the total number of days in a year:

122 / 365 = 0.334 (to three decimal places)

Step 3. Multiply these two numbers together:

$8,000 x 0.334 = $2,670

Minimum annual pension payment = $2,670
Maximum annual pension payment

Multiply the account balance by 10%:

$200,000 x 0.10 = $20,000

Maximum annual pension payment = $20,000

The maximum calculation is not pro-rated for the days remaining in the financial year and is rounded down to the nearest whole dollar.
Monthly pension payment*

Allowable annual pension payment = Between $2,670 (minimum amount) and $20,000 (maximum amount)

In this example, we'll choose the maximum amount of $20,000 and select monthly payments. There will be four monthly payments this financial year (March, April, May and June).

Divide the annual pension payment by the number of months left in the financial year:

$20,000 / 4 = $5,000

Monthly pension payment = $5,000

Your minimum and maximum annual pension payments will be recalculated on 1 July each year. 

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Do you have a Rest Term Allocated Pension?

The above calculations don’t apply to your account. Your minimum and maximum payments are calculated on 1 July each year based on the term remaining on your account.

You’ll find these details on your Annual Statement. Log in to MemberAccess and select ‘Pension’. Then select ‘Statements and correspondence’. Or call us on 1300 300 778.

Log in to MemberAccess

*You can choose to receive fortnightly, monthly, quarterly, half-yearly or yearly payments.

^ Your minimum annual pension payment will be rounded to the nearest $10.

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