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Pathfinder can model an existing or new account-based pensions (ABP). Pathfinder's default behaviour is to start an ABP if it will maximise the net wealth at the end of the analysis and the individual is eligible to do so, which usually means Pathfinder will start an account-based pension if it is required to meet their living expenses in retirement. Pathfinder can work out how much to roll over and how much to draw as a pension. It will keep within all the rules including their eligibility to draw a pension based on age and retirement date, the minimum withdrawal amount and transfer balance caps. As a general rule of thumb, Pathfinder will typically withdraw the minimum required pension and then make lump sum withdrawals if more funds are required.
In superannuation funds, it is possible to adjust the default behaviour (for example, start an ABP sooner), however, for SMSFs, you will need to Contact Optimo Financial.
Entering data for an account-based pension step-by-step
Pathfinder is very good at keep tracking of all the rules around starting a pension and lump sum withdrawals, and taking best advantage of them, so even if you know what you'd like the strategy to be, it's often less data entry to let Pathfinder optimise, and then only choose specific pension options once you've seen the result Pathfinder calculates.
Data required at the Current situation step
Pathfinder's optimisation can handle account-based pensions more easily if the case includes the following information:
|(if required) Enter the existing ABP balance, if the individual has already started one
If the individual has already started an ABP:
NOTE: you do not need to enter how much the individual is currently drawing as a pension because Pathfinder will calculate this for you.
Check your data at the Retirement planning sub-step (under the Cash flows & Goals step on the top menu)
|(Initial modelling) Make sure you're allowing Pathfinder to calculate the account-based pension and lump sum withdrawals.
For your initial scenario, it's a good idea to let Pathfinder calculate the pension and lump sum withdrawals (you can adjust it later, but if you let Pathfinder calculate it first, you might find that it's done what you wanted without you needing to steer it). For more about copying scenarios, see How to make another scenario for comparison
For SMSFs, currently, there are no options to control pensions, so you don't need to do anything further.
For Superannuation funds:
|Solve and check your initial results
|Adjust your scenario, if required
To adjust the pension or lump sum withdrawals from an SMSF, please Contact Optimo Financial, as options are not currently available in the interface.
To adjust the pension or lump sum withdrawals from a superannuation fund:
|Check your results again
Reading the results for an account-based pension
If funds are being kept in the pension phase, and you were expecting them to be rolled over to the pension phase, see Understanding why funds are kept in in the accumulation phase of super instead of the pension phase.
In the results, you can see the account-based pension in the following places:
- At the Strategy summary step:
- There is a section for each superannuation fund which will show the total balance and how it's split between the pension phase and accumulation phase. The chart is a good place to check if funds are being kept in the accumulation phase after the ABP is started.
- There is a Retire section for each individual that will list if an account-based pension is started
- At the Cash flows & Action items step:
- In the Cash flows report, the ABP will be listed in the Revenue section with a row called 'Superannuation income stream'
- In the Action items, there will be action items for:
- drawing an ABP, including the minimum withdrawal amount
- rolling funds to the pension phase
- rolling funds from the pension phase back to the accumulation phase
- When a TRIS is converted to ABP
- In the Detailed reports step, you can see an ABP in the following reports:
- Consolidated > Cash flows: There's a line for "Superannuation income stream" (note that this will be the total ABP payments if it is a couple)
- Consolidated > Cash flows (detailed): There's a line for "Superannuation income stream" for each individual
- If the ABP is drawn from a retail or industry super fund:
- Full details of the ABP pension are here: "Individual name" > "Super fund/SMSF name" > "Super fund/SMSF name" Pension > Pension payments
- You can also check the accumulation/pension phase balances under:
- (Individual) Super fund balances - this shows end of year balances only
- (Individual) > Super fund (or SMSF) - this shows the balances at the start of they year, after rollovers and at the end of the year.
- (Individual) > Cash flows > Superannuation transfer balance account: This shows you how close the individual is to the transfer balance cap
For more information, see Retirement Planning and Build Super results.
- Superannuation (a.k.a Super)
- SMSF (Self-Managed Super Fund)
- Retirement Planning and Build Super results
- Superannuation and SMSF Results
- How to convert a family home to an investment property (or vice versa) - a workaround
- What does the 'Robot' button mean?
- How to have two different cases open at the same time
- How to enter the details for a superannuation account
- How to use the sample data in Pathfinder
- How to see and edit the assumptions
- Suggested approach for modelling a case in Pathfinder
- Glossary of terms
- How to enter depreciation
- How to investigate differences between scenarios
- How to resend the activation email
- How to run a 'surplus cash' scenario
- Subscription FAQs
- How to maximise an individual's Age Pension entitlement by keeping their spouse's funds in the accumulation phase