Pension Fund Lump Sum Withdrawals

It is possible to make lump sum withdrawals from an account based pension, but not from a complying pension. However, the tax and administration costs need to be taken into account.

If the member is 60 or more, any lump sum is tax-free (provided that the benefit is available, meaning unrestricted).

If the member is at least 55 but under 60, the lump sum must first be available (meaning an unrestricted benefit). There is a tax-free threshold of $150000.

In terms of administration, a lump sum withdrawal from a pension account will require trustee minutes and processing of both the lump sum and the new pension through our accounting system. Accordingly, a lump sum withdrawal from a pension account will add between $250 and $300 to the annual administration cost.

Please note that the minimum pension must be drawn before payment of a lump sum. The minimum is calculated on a pro-rata basis up to the date of the lump sum.

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