What are preserved superannuation benefits and when can you access them?

All contributions made by an Australian themselves, or on their behalf, and all earnings since June 30, 1999, are classified as preserved superannuation benefits. 

These funds can only be accessed when you meet one of the conditions of release. These include reaching the preservation age and retiring or beginning a transition-to-retirement income stream.

You may also find that these funds are subject to other restrictions before they are released to you beyond the standard conditions of release. 

Reaching the preservation age is the earliest way of accessing preserved superannuation, besides exceptional circumstances. Preservation age is calculated by your date of birth. On reaching the preservation age and meeting a condition of release, you can begin accessing the preserved amount in your super.

Preservation age

Source: ATO.gov.au

Also, just because you hit the preservation age doesn’t mean you have to retire. You can still continue to work after reaching the preservation age and build more super funds. Whether these contributions are from your employer, salary sacrificed, or deductible personal contributions, they’ll help you continue to grow your super.

Deciding on the best way to access your super depends on certain factors like your personal situation, desired lifestyle, and how long you want your super to last. You can withdraw the super benefits as a pension, which gives you a regular income stream. Alternatively, you can opt for an annuity or lump sum payment.

Per the Superannuation Industry (Supervision) Act of 1993, superannuation benefits must be retained within the superannuation system until your permanent retirement or until you attain preservation age.

Superannuation can be confusing. Talking to an experienced professional to understand when and how you can access your retirement savings can help you better understand everything. 

Besides preserved component superannuation, benefits can be either restricted non-preserved or unrestricted non-preserved benefits.

Restricted non-preserved benefits

These are employment-related contributions, excluding employer contributions made before 1 July 1999. The restricted non-preserved benefits cannot be cashed until you meet one condition of release related specifically to these benefits. This can be nil cashing restrictions or termination of the employment associated with the benefits.

Unrestricted non-preserved benefits

These benefits don’t need to meet any condition of release and are paid when you request them to be. Some of these may include benefits where you’ve previously met a condition of release but continued to hold the money in your super account. Some employer termination payments (ETP) you received before 1 July 2004 are also classified as unrestricted non-preserved benefits.