In order for a member to be eligible to commence an account based pension within their superannuation fund, a condition of release must be satisfied. Under Superannuation Industry (Supervision) Regulations 1994 – Schedule 1, the following condition of releases are available for a member:
Reaching preservation age and retiring
Ceasing an employment arrangement on or after the age of 60
Reaching 65 years of age (even if the member is not retired)
Terminal Medical Condition
In today’s article, we are going to focus on understanding what ‘retirement’ specifically means when applying it to the above condition of releases (particularly, when a member reaches preservation age and retires and when an employment arrangement is ceased on or after the age of 60).
Regulation 6.01 of the SIS Regulations defines “gainfully employed” to mean “employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.”
The same regulation defines full time to mean gainful employment as “at least 30 hours each week” and part-time to mean gainful employment as “at least 10 hours, and less than 30 hours, each week.”
Retirement for superannuation, which is included in SIS sub-regulation 6.01(7), defines it as:
If Under 60
…the retirement of a person is taken to occur:
(a) in the case of a person who has reached a preservation age that is less than 60 – if:
(i) an arrangement under which the member was gainfully employed has come to an end; and
(ii) the trustee is reasonably satisfied that the person intends never to again become gainfully employed, either on a full-time or a part-time basis; or
If Over 60
(b) in the case of a person who has attained the age of 60 – an arrangement under which the member was gainfully employed has come to an end, and either of the following circumstances apply:
i) the person attained that age on or before the ending of the employment; or
(ii) the trustee is reasonably satisfied that the person intends never to again become gainfully employed, either on a full-time or a part-time basis.
What does this mean?
If Under 60
If a member is aged between 55 and 59, “retirement” is satisfied when employment is ceased, in addition to the member never intending to work again on either a full-time or part-time basis (i.e. less than 10 hours a week).
If Over 60
If a member is aged 60 and over, “retirement” is satisfied when employment is ceased. In this case the intention to return to the workforce is irrelevant.
Frequently Asked Questions
Q – What is preservation Age?
A – A person’s preservation age ranges from 55 to 60, depending on their date of birth. Preservation is a restriction that prevents a member from accessing superannuation benefits until retirement or until satisfying a condition of release.
The below table summarises when preservation can be accessed.
Date of Birth
Reaches Preservation Age
Before 1 July 1960
Before 1 July 2015
1 July 1960 – 30 June 1961
1 July 2016 to 30 June 2017
1 July 1961 – 30 June 1962
1 July 2018 to 30 June 2019
1 July 1962 – 30 June 1963
1 July 2020 to 30 June 2021
1 July 1963 – 30 June 1964
1 July 2022 to 30 June 2023
After 30 June 1964
From 1 July 2024