The change of preservation age to 60 has simplified considerations around whether super fund members have met a condition of release to access benefits, despite regulations stating other requirements still apply.
SMSF Association technical manager Fabian Bussoletti highlighted the increase of the preservation age to 60 on 1 July 2024 made it easier to quickly assess the status of a client and what further action could be taken with them.
“Preservation age has finally reached its destination at age 60, which now means that anyone who is 60 or over have reached their preservation age regardless of what their actual age might be. It also means if you’re not 60, you haven’t yet reached your preservation age,” Bussoletti said during a session at the SMSF Association National Conference 2025 in Melbourne today.
He noted it was important to remember this change to the preservation age in regards to a retirement condition of release as the Superannuation Industry (Supervision) (SIS) Regulations still contained a definition that changed depending on your age.
“There’s a retirement definition if you are between the age of preservation age and age 60, and a retirement definition for those people aged 60 or over,” he said.
“Given we have this alignment between 60 and preservation age, we’re only interested in the retirement definition that applies to people who are 60 or over.
“When we take a close look, it requires that somebody has terminated an arrangement for gainful employment and then there are two separate pathways that can satisfy that retirement definition.
“The first pathway tells us that if you terminated employment on or after turning 60, you have met the retirement condition of release.
“The second pathway does not get as much airplay and states if you’ve terminated an employment arrangement at some point and are able to satisfy the trustees of the fund you have no intention of going back to work for 10 hours or more a week, you have also satisfied the retirement condition of release.
“It is effectively identical to the retirement definition [in the SIS Regulations] that applies to people who are between preservation age and 60.
“So with the retirement definition, depending on when termination occurs, that will dictate which pathway they have to satisfy to be able to access benefits.
“For those people who terminate employment between 60 and 65, you can access your benefits, but for those who terminate employment prior to age 60, we’ve got to ask additional questions about whether or not they intend to return to work again.”
