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What are my superannuation options at retirement?As you know, superannuation is designed to provide for you in retirement. So when you reach retirement, what are your options?

There are basically four options:

You can take your super as a lump sum;1.

You can take your super as a retirement income stream; 2.

You can take part of your super as a lump sum and part 3. as a retirement income stream; or

You can leave your super in the Retained Benefits Facility.4.

Any decision you make regarding your superannuation benefits will be an important one that could have tax implications and may also have implications for any social security payments you may be entitled to. The Trustee recommends that you speak to a licensed or appropriately authorised financial adviser before you make a final decision.

When can I access my super?Preserved and restricted non-preserved superannuation amounts cannot be accessed in cash until you satisfy a condition of release, which includes:

when you have reached your preservation age (see fbelow) and have permanently retired from the workforce;

when you terminate employment with your current femployer after age 60;

when you reach age 65; f

if you become permanently incapacitated; or f

if you die. f

If you hold or have held a temporary Australian visa and are not at the time of payment an Australian or New Zealand citizen or permanent resident these conditions of release may not apply.

What’s my preservation age?

When you were born Your preservation ageBefore 1 July 1960 55

1 July 1960 – 30 June 1961 56

1 July 1961 – 30 June 1962 57

1 July 1962 – 30 June 1963 58

1 July 1963 – 30 June 1964 59

After 30 June 1964 60

What is a retirement income stream?A retirement income stream is a regular payment of money, generally from money that was previously invested in superannuation. There are several different retirement income stream products as outlined below:

Allocated pensions f – a popular retirement income stream product due to their flexibility. The pensioner can change their payment amounts at any time, subject to set minimums, and can commute the pension to a lump sum at any time. There is no guarantee that payments will last for any length of time. Allocated pensions can only commence with superannuation money and generally the pensioner can select their own investment strategy. This product is available within the Alcoa Plan (see overleaf)

Transition to retirement pensions (“TRAPs”) f – available to people who are over their preservation age, TRAPs can be used for transitioning to retirement by reducing work hours but maintaining take-home pay. The pensioner can change their payment amounts at any time, subject to set minimums and maximums. There is no guarantee on the length of time payments will last. Lump sum withdrawals are generally not permitted. This product is available within the Alcoa Plan (see overleaf)

Immediate annuities f – can commence with both super and non-super money, these products are offered by life offices. The pensioner can nominate a fixed term or lifetime annuity. Access to capital is generally restricted once payments commence. Certain annuities (called complying annuities) are 50% exempt from the Age Pension assets test, but have a number of restrictions. This product is not available within the Alcoa Plan.

Term allocated pensions f – these products have some features of an allocated pension and some features of a fixed term annuity. These are complying income streams and therefore qualify for the 50% assets test exemption for social security purposes. The pensioner can generally select own their investment strategy, however there is no access to capital and the payment amounts are fixed each year. This product is not available within the Alcoa Plan.

Fact Sheets

Alcoa of Australia Retirement Plan

What are my options within the Alcoa of Australia Retirement Plan?The Trustee of the Alcoa of Australia Retirement Plan offers the following options for members who are leaving Alcoa’s service or are approaching retirement:

Retained Benefits Facility f – this section of the Plan allows members who leave the employment of Alcoa (at any age) to retain their lump sum superannuation benefit within the Plan. You can select the investment option that applies to your account and your balance will be credited with investment earnings (which may be positive or negative) and debited with fees and any lump sum payments made to you. Further details on the Retained Benefits Facility can be found in the Accumulation Section Product Disclosure Statement.

Transition to Retirement Pension Facility f – this section allows Plan members who are over their preservation age to receive from the Plan a non-commutable income stream, called a Transition to Retirement Allocated Pension (or TRAP). Rollover money from your superannuation is credited to an individual Pension Account in your name and you can nominate the amount of income you wish to receive, subject to Government-imposed minimums and maximums. Further details on the Transition to Retirement Pension Facility can be found in the Pensions Product Disclosure Statement and the Transition to Retirement Pensions Fact Sheet.

Allocated Pension Facility f – this section allows Plan members who are retiring from the workforce the option to receive an income stream from the Plan in the form of an allocated pension. Rollover money is credited to a Pension Account in your name and you can nominate the amount of income you wish to receive, subject to Government imposed minimums. Further details on the Allocated Pension Facility can be found in the Pensions Product Disclosure Statement and the Allocated Pensions Fact Sheet.

What are some of the advantages of the Retained Benefit Facility?

Fees f – the Plan’s fees are competitive compared to other superannuation products on the market, which can make a significant difference to your superannuation balance over your lifetime. See the Accumulation Section Product Disclosure Statement for details of the current fees.

Contributions f – you can continue to make after-tax voluntary contributions to the Plan, within the Government-imposed annual limits, and potentially receive the benefit of the Government co-contribution.

Rollovers f – you can roll over or transfer any other superannuation benefit entitlements you may have into the Retained Benefit Facility. There are no fees charged by the Plan on any benefits you elect to transfer.

Investment choice f – you can continue to invest your super balance in the same investment options as are available within the Accumulation section of the Plan.

Website access f – you will continue to have access to your super account information and Plan documentation via the Plan’s website.

What are some of the advantages of the Allocated Pension and the Transition to Retirement Pension Facilities?

Tax advantages f – Investment earnings on your account are tax free. Pension payments and lump sum withdrawals are generally tax free when paid from age 60. You may be entitled to a tax rebate of up to 15% if you are at least age 55 and under age 60.

Social security advantages f – You may receive concessional income test treatment with only part of the pension assessed for the Social Security Income Test.

Investment options f – you have access to the Plan’s member investment choice options.

Plan membership f – you continue to be a member of the Plan and enjoy the benefits of this membership.

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Need further advice?If you would like further information to assist you as you approach retirement you can:

read the Plan’s Product Disclosure Statements and fFact Sheets, which are available on the Plan’s website at www.alcoasuper.com.au; or

phone the Helpline on f 1800 355 028.

If you would like advice that takes into account your specific financial situation, needs and objectives, you should contact a person or organisation that is licensed to provide personal advice, such as a licensed financial adviser.

Alcoa of Australia Retirement Plan Issued by Alcoa of Australia Retirement Plan Pty Ltd ABN 80 065 702 454RSE Licence L0002974 as Trustee of the Alcoa of Australia Retirement Plan.ABN 80 928 800 255 Registration No. R1057058 A

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