When you set up a DIY Superannuation Fund, it becomes your DIY Pension Fund when your pension commences. Many of the advantages of having a DIY Pension Fund are carried over to having a DIY Superannuation Fund, such as:

• Control – you make your own investment decisions and you can tailor your investment strategy to suit your financial needs.
• Investment flexibility – you can invest in a large variety of financial products or investments that are not normally available via traditional retail funds. For example, acquisition of property and other permitted investments, including shares, bonds, mortgages and fixed interest loans can be made by your DIY Pension Fund.

Here are some other points to bear in mind:

• You choose how often your pension is paid to you each year eg. weekly, fortnightly, monthly, quarterly, six monthly or yearly.
• You can choose what income stream you need, between a minimum and a maximum figure, plus there is no maximum if you are over 60 unless you are still working and under 65.
• Any payments from a Superannuation or Pension Fund (lump sum or pension) for a retired person over 60 or of pension age will not be taxable.
• No tax is payable on the income or capital gains of your Pension Fund, including for assets in the Superannuation Fund that were purchased prior to commencement of the pension.
• Franking credit dividend rebates can mean tax refunds to the Fund each year.
• Commutations of capital from allocated pension can be made if required, but can have taxation consequences if you are under 60 or not retired and under pension age. When retired, all of the capital can be drawn down from an allocated pension at any time so that there is complete access to capital.
• They can offer a reversionary pension on death to the spouse, which means that funds stay in the tax advantaged pension environment until the death of the remaining pensioner.
• The creation of non concessional personal contributions results in exempt components on death for non-dependents, who would otherwise pay tax at 16.5%.
• One fund can have several different facets at the same time so that there is no need to go to the expense of setting up separate funds.
• Non commutable allocation pensions (also called transition to retirement pensions) can be commenced from the age of 55 while still working. These pensions can have an exempt portion and the balance is taxed at the marginal tax rate and receive a 15% tax rebate. This can be combined with salary sacrificing into Superannuation to reduce your overall tax to as little as 15%. At the same time income in the pension fund is tax free.