Ask an Expert

Q: I’m 58, a contributing member of SASS and I don’t have a spouse. I understand that I cannot nominate a beneficiary. Can you please explain what would happen with my benefit if I were to pass away? 

Great question, given the SASS scheme rules state that an eligible spouse or de-facto partner is entitled to the death benefit.^ So what happens if you don’t have a partner?

If a claim is made by more than one eligible person, the Trustee will decide how to distribute the payment. In your situation, where there is no eligible spouse or de-facto partner,^{^} a lump sum death benefit would generally be paid to the executor or administrator of your estate. Your SASS benefit will then be distributed to your beneficiaries via your estate. It is important to have a current Will as part of your estate plan to ensure your wishes are carried out.

The death benefit usually includes your full entitlements, such as the lump sum basic benefit. If you were transferred to SASS from a predecessor fund, your death benefit may also include additional features such as a reversionary spouse pension. For more information on a reversionary spouse pension go to statesuper.com.au.

Although it’s not something we like to think about, it’s important that the scheme can contact your spouse, family member or executor if you pass away. You can add their contact details to your account by calling State Super Customer Service on 1300 130 096. It’s best to put this in writing so it can be added to your member record.

Q: I am looking at employment opportunities outside of NSW Public Service. If I resign from my SASS employer, what will happen to my SASS benefit?

When you resign from your SASS employer, you’ll need to make some important decisions about your super.

At the point of resignation, the defined benefit components of your account (the employer-financed benefit and the basic benefit) will be calculated, and you can no longer accrue benefit points. You and future employers will not be able to make further contributions to SASS. If you have not yet reached 180 accrued benefit points, you’ll be giving up the ability to maximise your employer-financed benefit.

If the total value of your total employer-financed benefits (including the basic benefit and any additional employer contributions) is lower than the super guarantee you would have been entitled to for your years of service, the benefit will be adjusted to that amount.

Resigning before your scheme’s earliest retirement age

For most members, the earliest retirement age is 58. If you resign before this age, your exit is treated as a resignation benefit. Any additional benefit cover you hold will also cease.

You’ll then have two options: 

1. Take a withdrawal benefit and roll your benefit over to another super fund. 
2. Defer your benefit within SASS. 
    

Both calculations will include your personal account and your additional lump sum benefits, but your employer-financed benefit is worked out differently depending on the option you choose.

Under a withdrawal benefit, your employer-financed benefit is calculated as 2.5% of your personal account balance multiplied by your years of service.

Under a deferred benefit, it’s calculated as your accrued benefit points at resignation x 2.5% x final average salary, with a 1% per year discount factor applied for the period between your exit date and your 58th birthday.

Resigning after your scheme’s earliest retirement age

If you resign on or after your scheme’s earliest retirement age, you are generally eligible for a retirement benefit. In this case, the calculation is the same whether you defer or roll over your benefit.

At this point, your restricted non-preserved amount will also become unrestricted non-preserved, which means you can cash it out or roll the balance over to another super fund.

The balance will remain subject to the Commonwealth Super preservation rules and you’ll only be able to withdraw it once you meet a condition of release.

For more information refer to the State Super Fact Sheet 4 – When can I be paid my superannuation benefits?
 

Deferring your benefit within SASS

If you choose to defer your benefit, you and your future employers can no longer contribute to SASS. You’ll need to open an account with another super fund so your new employer can pay the super guaranteed contributions (currently 12% of your salary) into it.
 

How financial advice can help 

Resigning from your SASS employer is a big decision. You could be giving up valuable benefits, so it’s important to understand what you’re leaving behind and how your entitlements with a new employer compare. An Aware Super financial planner can help you weigh up the options and understand the financial impact of your career change. Go to aware.com.au/statesuperadvice to make an appointment at no extra cost.

Where to next?

Protecting your super from scams

Is a living inheritance right for you and your family?

When can I withdraw my SASS benefit and what can I do with it?

A simple guide to your SASS statement

Ask an expert: Changing careers and SASS

Market review and outlook

Back to Edition 22