When can I withdraw my SASS deferred benefit?

As part of your retirement planning, you’ll need to decide what to do with your SASS deferred benefit. Once you know how much you’ll need to live on and where your retirement income will come from, you might be wondering exactly when you can access your money.

Generally, you will be able to move your deferred benefit from SASS when you reach your scheme earliest retirement age which is shown on your account statement. However, any benefit released to you from your SASS account, will still be subject to the Commonwealth’s superannuation benefit preservation rules.

This means that your benefit will need to meet the normal superannuation access rules before you can access the funds.

One of those rules is that once you reach age 60, you can access your super if you terminate an employment arrangement after that age. Use this handy flow chart as a guide to help you understand other circumstances when you can access your SASS deferred benefit. It does not take into account your personal circumstances.

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Preservation age applies to SASS members

Once you’ve reached preservation age (between 55 and 60, depending on when you were born) and have permanently retired – that is, you have stopped work and have no intention of working 10 hours or more in any week in the future – then you can have access to your super. So, if you have retired before age 60, but are planning to work more hours than this, even if you’ve reached your preservation age, you won’t be able to access your super yet. Once you reach age 60, you will be over your preservation age, so if you terminate an employment arrangement after that age, regardless of your future work intentions, you will be able to access your super at that point. Once you reach age 65, you can have access to your super – with no restrictions or other criteria to meet.

SASS members who deferred as a result of resignation

If you have a deferred benefit as a result of resignation from your SASS employer, you need to take care if you intend to roll that benefit out of SASS before reaching your scheme eligible retirement age (which is generally 58, however for some older predecessor schemes it can be 55), as it could put you at a significant disadvantage.

In this case, you would only receive the amount that had been payable on your original resignation or dismissal date, adjusted for market movements. That amount is generally significantly less than the amount you would be entitled to if you leave the benefit deferred with SASS until at least the SASS eligible retirement age. You are however entitled to access a SASS deferred benefit earlier than the scheme eligible retirement age in the event you suffer total and permanent incapacity, financial hardship, or if your benefit is paid as a death benefit.

Transition to retirement strategy

If you have reached your preservation age and have not yet met the remaining super conditions of release,¹ and you need to access your super then a transition to retirement account (also known as a TTR account) may be an option for you. You can continue working and use your super to pay yourself a regular income.

A TTR account permits you to access between 2% and 10% of the balance of your account per annum.²

If you’re under age 60, the tax-free portion of your TTR income payments are not subject to personal income tax. The taxable portion of your income payments would generally be taxed at marginal tax rates, less a 15% offset These income payments become tax-free once you reach 60.

Investment returns within the account are taxed concessionally at a maximum of 15%.

When you reach age 65, a TTR account will automatically be converted into a retirement income stream account (also known as an ‘account-based pension’). In a retirement income stream account there is no annual upper limit on the amount of income you can access. And, investment earnings are not subject to tax within the account, meaning you have more of your balance to keep invested and earn income over time.

A TTR account is not offered within your SASS account. Once you have access to your deferred benefit you can rollover or consolidate your SASS benefit to another superannuation fund and start a transition to retirement account (such as an Aware Super Transition to Retirement Income Stream account).

Let’s take a look at how it can work

In this scenario we introduce you to Pat who is 60 years of age. Pat has $200,000 in superannuation, earns $60,000 a year and decides to establish a TTR strategy. He makes salary sacrifice contributions to his super account and draws income from his TTR account to top up his take-home pay. Using a TTR strategy Pat can reduce the rate of tax paid and can add an extra $3,832 to his super after one year. The best part is that Pat has been able to maintain the same level of take-home pay each year.

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^{1. Conditions of release rules, in addition to preservation age, require that if you are under age 65, you need to have permanently retired and not intend to work more than 10 hours a week, or if you are between age 60 and age 65, have left an employment after age 60 regardless of your future work intentions. Suffering a total and permanent disability, terminal illness, or death will also trigger release of super.}

^{2. Minimum and maximum withdrawal requirements apply. The minimum is normally 4% however the Government has applied a 2% minimum for the 2022/2023 financial year.}

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