Role change is not retirement

A superannuation expert has confirmed an individual taking on a new role with no other employment variations at their existing workplace does not satisfy the definition of retirement under the Superannuation Industry (Supervision) Regulations, meaning they will not have met a condition of release regarding their retirement savings benefits in these circumstances.

“[If the person in question] is continuing on doing perhaps the same hours with the same company, but now has a different job title, different set of responsibilities, can he access his superannuation?” BT Financial Group advice strategy and technical specialist Tim Howard asked attendees of a BT Academy webinar held today.

“Ninety-nine times out of a hundred the answer is going to be no because while his role has changed, what we’re looking at here is [whether he has] ceased a gainful employment arrangement. [In this situation] he hasn’t, he’s just changed the job title.”

Howard pointed out if the circumstances saw the employee change his status from a full-time worker to a part-time worker, it would likely still not allow him to gain access to his superannuation benefits.

“Most of the time, the argument for that will be [it] is just a change of employment terms under the same gainful employment arrangement,” he said.

According to Howard, if there is doubt as to whether a gainful employment arrangement has ceased, individuals can use some items of evidence that can provide more clarity.

“While there is no guidance from regulators around, from a practical standpoint, I would expect to see things such as a termination letter from the employer, [evidence] all of [the person’s] annual and long service leave being paid out, [the person’s] sick leave expiring and your employee number no longer existing,” he indicated.

“Those are not requirements, but they’re examples of things that would align with an [employment] arrangement actually ceasing.”