Subject to meeting a relevant condition of release, you can apply to have deferred benefits paid out of the scheme at any time, either by rollover to another superannuation fund or making a cash withdrawal.
Accessing your benefit under different circumstances
The circumstances under which you access your deferred benefit can affect the benefit your are entitled to. The main time to access your benefit are:
- from age 55
- at or after normal retirement
- at or after age 65
- on the basis of permanent incapacity
You can also access your benefits prior to age 55, by applying to be paid an immediate lump-sum benefit. However, if you decide to withdraw the immediate lump-sum benefit, you will forfeit your right to a deferred pension and spouse or de facto partner and children's benefits will not be payable on your death.
It must also be noted that if you are a NSW public sector senior executive officer who deferred a benefit without ceasing employment, there is no immediate lump sum payable at any time. However, you can elect to have the actuarially calculated transfer value of your deferred benefit rolled over to another superannuation scheme at any time while you remain an executive officer.
You can apply for the deferred pension from age 55 even if you are still working. If your normal retirement age is age 60 and you request payment of your benefit before age 60 then your deferred pension is paid at a reduced rate. However, part of your pension will be deemed a preserved pension if you have not met a Commonwealth condition of release. There are two options for this preserved portion:
- You can elect for the preserved pension to remain deferred in SSS until you meet a condition of release along with your basic benefit. The amount of your preserved pension will accrue each fortnight to a deferred account in your name and your account will be adjusted with investment earnings at the Fund Earning Rate. You may elect to roll over your basic benefit to another superannuation fund if you do not wish for it to remain deferred.
- Alternatively, you can elect to take the preserved pension as a 'non-commutable' pension. This means that the preserved pension can be paid but your right to commute the pension is restricted.*
*The preserved part of the pension can only be commuted:
- by you within six months of the date the pension commences to be paid provided you have met a full condition of release during that six month period
- by your spouse or partner, including a same sex partner, should they receive a spouse pension after your death, within either:
- 20 years of your pension commencing, or
- the period of your life expectancy at pension commencement, if this is less than 20 years.
For more information about the preservation requirements and pensions, refer to the section 'How are pensions affected' in STC Fact Sheet 4: When can I be paid my superannuation benefits?
The deferred benefit payable is a fortnightly pension entitlement that will be available to you at your normal retirement age and, if applicable, the early retirement age.
The initial calculation of the deferred pension benefit consists of two parts:
- the employee-contributed part
- the employer-financed part.
This calculation will be undertaken when you cease employment.
The employer-financed component of a deferred pension benefit is generally adjusted in October each year in line with the movement in the Consumer Price Index (All Groups Index) for Sydney for the previous year ended 30 June. A pension benefit that was not deferred for a full year ending 30 June is partially adjusted for CPI based on the number of full quarters it was deferred during that year.
For more information, see SSS Fact Sheet 17: Optional deferred benefit and STC Fact Sheet 11: CPI adjustment of your pension.
Current scheme legislation requires that your SSS deferred benefit must be paid to you if you:
- are aged between 65 and 70 and have stopped work altogether or are working less than 10 hours each week
- are aged 70 or over and have stopped work altogether or are working less than 30 hours each week.
If you decide to leave your benefit deferred in SSS after reaching your normal retirement age, the employer-financed component will continue to be adjusted with CPI. However, your pension will only be paid from the date your application is received by the administrator. If you apply after your normal retirement age, back payment to this date is not possible. Generally it is not in a member's best interest to defer benefits in the scheme beyond the normal retirement age. We recommend you obtain financial advice if you are considering this option.
For further information, please refer to SSS Fact Sheet 20: Contributions and benefits up to age 70.
If you suffer permanent physical or mental incapacity, where the incapacity prevents employment in any occupation that it would be reasonable for you to undertake, you can apply to be paid the deferred pension.
The Trustee determines whether these grounds exist, on the basis of medical advice provided by the NSW Government Medical Assessment Service Provider or other medical advisers nominated by the Trustee.
Commonwealth payment rules
If you are under your preservation age (between 55 and 60), you can apply for the compulsorily preserved component of your benefit only if you provide certification from two legally qualified medical practitioners. They must certify that you are 'unlikely to ever be employed in a capacity for which you are reasonably qualified because of education, training or experience'.
Your preserved component may include all or part of your basic benefit, Commonwealth Government co-contributions and some of your pension benefit.
If part of your pension must be preserved, you have two options:
- it can be paid immediately as a non-commutable pension; or
- it can be paid each fortnight into a separate account, where interest will be applied at the Fund Earning Rate.
If you are suffering from a terminal illness, then you may be able to apply to have your lump sum benefit paid free of any tax, subject to certain eligibility criteria.
Can an invalidity pension be exchanged for a lump sum?
An option exists for an invalidity pension to be commuted for a lump sum at age 55 and, if that option is not exercised then, again at age 60. See SSS Fact Sheet 14: Exchanging your pension for a lump sum.
For more information please refer to SSS Fact Sheet 9: Invalidity retirement benefit.
In exceptional circumstances you may be able to gain early access to a part of your SSS benefits on the grounds of severe financial hardship or on compassionate grounds.
For more information regarding the early release of your benefit, refer to STC Fact Sheet 2: Early release of superannuation benefit on the grounds of severe financial hardship and STC Fact Sheet 6: Early release of superannuation benefits on compassionate grounds.
Commonwealth provisions generally require part of your superannuation benefit to be preserved until you either:
- cease employment from age 60
- retire from the workforce permanently at or after your preservation age (between 55 and 60).
In effect this means you cannot withdraw your super until you meet one of these conditions of release.
In the event that you are permanently incapacitated or if you die, your preserved component is immediately payable.
The preservation age of a fund member is defined in the table below. You will see that the preservation ages increases gradually between age 55 and 60 for those born after June 1960.
| Date of birth | Preservation age |
|---|---|
| Before 1 July 1960 | 55 years |
| Between 1 July 1960 and 30 June 1961 | 56 years |
| Between 1 July 1961 and 30 June 1962 | 57 years |
| Between 1 July 1962 and 30 June 1963 | 58 years |
| Between 1 July 1963 and 30 June 1964 | 59 years |
| After 30 June 1964 | 60 years |
Preservation rules at different ages
- If you have reached your preservation age but are under 60 years of age, retirement means you have ceased work permanently.
- After you reach 60 years of age, you can access your preserved benefit whenever you cease your employment.
- At age 65, you can access all of your benefit whether or not you have ceased employment or retired.
For more information about preservation age, refer to STC Fact Sheet 4: When can I be paid my superannuation benefits.