Benefit access due to retirement limited

A senior industry executive has reminded practitioners of the limits applied to the superannuation benefits an individual can access if they are relying on using the definition of retirement as a condition of release once they have reached preservation age.

BT Financial Group advice strategy and technical specialist Tim Howard said the definition of retirement to which this detail relates is where an individual makes a declaration to the super fund trustees they have ceased a gainful employment arrangement on or after reaching age 60.

Further, Howard acknowledged the limit to the benefits able to be accessed using this condition of release is why the superannuant is usually asked for additional information.

“That is where trustees, not always, but often will ask you for the date you ceased employment. Why do they do that? Because that condition of release, by the technical application of the law, [will only allow access] to the preserved benefits at that point in time,” he told attendees of a recent technical webinar.

“[That is] the point in time [the person ends] that previous arrangement.”

In addition, he took the opportunity to clarify how the limit operates in relation to which definitions of retirement an individual might be meeting.

“In the event you are continuing to work but relying on having ended a singular arrangement since turning 60, [you can access] the balance as at the date you ended that arrangement,” he explained.

“If you are not intending to work more than 10 hours a week going forward, then it is the balance as at the date you made that declaration.”

He pointed out there are also other declarations individuals make to trustees to gain access to their retirement savings, one being they have reached the age of 65 and the other being a statement saying they are suffering ill health and, as such, are unlikely to be engaging in gainful employment for which they are qualified.