Q: I’m a contributing member of SASS and I’m considering a career change in taking up a role in the private sector. What will this mean for my SASS benefit?
While career choices hinge on various factors beyond just super, SASS members yet to accrue 180 benefit points must weigh up the substantial superannuation benefits they stand to lose. It’s important to assess if the new role’s financial rewards, career growth, or lifestyle improvements justify forfeiting potential benefits. Upon leaving the public sector, your contributing SASS membership stops and your accrued points freeze. You’re then faced with two options: defer your benefits within the scheme or transfer them to a different super fund.
If you haven’t reached the minimum retirement age within the scheme, it’s advisable to obtain a benefit estimate from State Super Customer Service. This will help determine if deferring your benefit yields a more favourable outcome, at least until you reach the scheme’s earliest retirement age.
Once you leave your SASS employer, neither you nor your new employer can further contribute to SASS. So you will need to open an account with another super fund, where your new employer must contribute to the super guarantee, which is currently at 12% of your salary. Note that with the exception of some limited circumstances, re-entering the NSW public service won’t allow you to resume SASS contributions.
For those who’ve accrued 180 benefit points, the financial disparity between staying with SASS and receiving superannuation guarantee contributions generally diminishes. Your employer’s contribution is capped at the Basic benefit plus, if you’re eligible, the Additional Employer Contribution. The employer-financed benefit only grows if your salary does.
Another critical aspect in your decision-making is the shift from having a defined benefit account to a regular super account, once you defer your benefit. As an active contributor, only your personal account was influenced by your chosen investment strategy’s performance. In contrast, deferring your account means your entire benefit is invested and subject to the fluctuations of investment returns.1
A career change at any time of life 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. A financial planner can help you weigh up your options and make sure you’re taking the right steps for your future.