Retirement bonus: what is it and how can you get one?

A retirement bonus is a one-off lump sum that some super funds pay when you move your super into a retirement-phase income stream, such as an account-based pension. Sometimes also called a pension bonus, it’s a way for funds to pass back to you a tax saving that arises when your money stops being in the taxed accumulation phase.

To be clear: this is additional money in addition to your super account balance that may be paid into your account when you transfer your super into a retirement-phase pension account, such as an account based pension (ABP). 

It’s not related to the government’s Age Pension or any government-funded bonus for retirees.  

A retirement bonus, is a credit some super funds add to your account when you move eligible super into a retirement-phase pension account. You don't apply for it as a payment in the usual sense – it's calculated and added by your pension account when you satisfy the eligibility criteria. 

Not every fund offers one, and different super funds may calculate it in different ways. 

While your super is in the accumulation phase, your fund pays tax on the investment earnings your money makes. This includes making a provision for capital gains tax (CGT) on assets that have grown in value but haven't been sold yet. The fund sets aside money to cover that future tax.

When you retire and move your super benefits into a retirement-phase pension account, such as an ABP, your benefits are transferred into a tax-free environment. This means the investment returns you receive on your pension account, including any capital gains, become tax-free. 

This means part of the CGT provisions the fund had set aside to pay any CGT when the assets were sold is no longer required. 

A retirement bonus represents these released CGT provisions being passed back to members when they start a retirement phase pension.

A retirement bonus works by releasing a tax provision when your balance moves from the accumulation phase into the retirement phase. In simple terms:

• Your super sits in the accumulation phase, where earnings are taxed and the fund holds a CGT provision against unrealised gains.

• You meet a condition of release and start a retirement-phase account (commonly an account-based pension).

• Earnings in a retirement-phase account are tax-free, so part of the fund’s CGT provisions is no longer required. 

• The fund uses those tax savings to fund the payment of the retirement bonus to your new retirement phase pension account. 

The amount, the eligibility rules and the timing are all set by the individual fund. 

A retirement bonus is not a contribution. You aren't adding your own money – rather, the fund is crediting you a tax saving. 

Because it isn't a contribution, it doesn’t count toward your concessional or non-concessional contribution caps. 

That's an important distinction, because contributions you make to your super before you retire are subject to annual caps, or limits, but a retirement bonus sits outside those caps.

While a retirement bonus isn’t included in your contribution caps, the amount that is transferred into a retirement-phase account does count toward your personal transfer balance cap – the lifetime limit on how much super you can move into the tax-free retirement phase. 

From 1 July 2026, the general transfer balance cap is $2.1 million, up from $2.0 million in 2025–26. Your personal transfer balance cap is the limit that actually applies to you and is based on your own history. 

If you start your first retirement-phase income stream on or after 1 July 2026, your personal cap is the full $2.1 million. If you have previously started a retirement phase pension account before that date, your personal transfer balance cap will be between $1.6m and $2.1m.

If you're close to your cap, your retirement bonus could push you over your personal transfer balance cap, so it's worth checking before you start your pension. 

Read more about the transfer balance cap. 

You are generally eligible for a retirement bonus if you're moving eligible super from your accumulation account into a retirement-phase pension account, your fund offers a retirement or pension bonus, and you meet that fund's conditions. 

Conditions commonly include:

• having met a condition of release (for example, reaching age 60 or more and retiring).

• holding your super in an eligible account or investment option before the transfer.

• meeting any minimum membership period the fund requires – these can apply both before and after the transfer to start a retirement phase pension account.

• transferring a qualifying balance, if the fund sets one. 

Eligibility, qualifying balances and member-period rules vary by fund – there is no single standard. Always check the specific terms of your super fund. You should also be aware some funds may claw back any retirement bonus payment if you fail any ongoing membership period requirements.

Your retirement bonus is calculated by your fund and the amount you're paid can vary. 

Funds that offer a retirement bonus typically work it out as a percentage of the eligible balance you transfer into a retirement-phase account, reflecting the CGT provision being released. 

Because the calculation depends on each fund's tax position and the assets backing your account, two members transferring the same amount in different funds could receive different bonuses – and some funds don’t pay a retirement bonus. 

The CFS Pension Bonus is a retirement bonus that may be added to your account when you move eligible super into a CFS retirement-phase pension account or income stream, such as an account-based pension. 

To be eligible, you must:

• transfer super to a FirstChoice Wholesale Pension on a like-for-like basis¹ from a FirstChoice Wholesale Personal Super account, FirstChoice Employer Super account, or FirstChoice Wholesale Pre-Retirement Pension.
• have opened at least one eligible FirstChoice super or pre‑retirement account involved in the move to pension at least 90 days prior to starting a pension.
• not previously have received a Pension Bonus from the FirstChoice Superannuation Trust (the Pension Bonus is only payable once in a member's lifetime).
• transfer super from your ‘Qualifying Investment Options’ up to the transfer balance cap maximum. Most options qualify, but some cash options are excluded. See the list of excluded options.

How the amount is calculated:

• We calculate your eligible balance based on the amount transferred from your Qualifying Investment Options, plus any refunds for buying and selling investments (buy/sell spread).
• Your eligible balance for Pension Bonus calculation is restricted to the general transfer balance cap ($2.1 million from July 2026) maximum.
• We apply the Pension Bonus rate set by the trustee on the day your pension transfer is processed. The rate may vary from time to time and, in specific circumstances, may be set to zero.
• From August, eligible members will see an estimated Pension Bonus in FirstNet or the CFS mobile app. This is an estimate only and is based on your eligibility, balance and the Pension Bonus rate at the time. Your final amount may differ. 

Member period:

• The CFS Pension Bonus applies to eligible transfers to a retirement-phase account from the second half of 2026. Read more about the CFS Pension Bonus.
• At least one eligible FirstChoice super or pre‑retirement account involved in the move to pension must have been open for at least 90 days prior to starting a pension.

If you’re unsure about how a retirement bonus may interact with your transfer balance cap or your broader retirement plan, consider speaking to a licensed financial adviser.

Explore our financial advice options. 

A retirement or pension bonus from a super fund is not the same as Centrelink’s Age Pension, or any government-funded one-off bonus payment to retirees.

A retirement bonus is paid by your super fund when you move into the retirement phase. It's a tax-related credit and has nothing to do with Centrelink or the government.

Occasional one-off ‘bonus’ payments mentioned in the news (for example, cost-of-living payments) are also unrelated to super-fund retirement bonus payments.

If a fund or product refers to a ‘Pension Bonus’, check the context: in this article, and in the CFS Pension Bonus product, it means a super-fund retirement bonus.

• It's not guaranteed. Not every fund offers one, and conditions apply.

• Rules vary by fund. Eligibility, calculation and member periods may differ, so check the specific Product Disclosure Statement.

• It counts towards your transfer balance cap, which is the maximum amount you can transfer to a tax-free retirement-phase pension account in your lifetime. If you're close to your personal transfer balance cap, your retirement bonus could push you over it, so be aware of your cap and login to your account or download the CFS mobile app to check your CFS account balance. Eligible CFS members will see an estimated Pension Bonus in FirstNet or the CFS mobile app.

• Timing matters. A retirement bonus is generally a one-off lump sum applied when eligible members transfer super from super to a retirement-phase account, so it's worth understanding the rules before you transfer. 

• Get advice if you're unsure. A licensed financial adviser can help you weigh the benefits of a retirement bonus against your wider retirement strategy.

Thinking about retiring? Learn about the benefits of moving your super into a retirement-phase account and establishing a tax-free income stream in retirement. 

• Learn about account-based pensions

• Read more about the CFS Pension Bonus

• Plan your retirement with CFS.