What Happens To My Super If My Employment Ceases?  5th February 2009

When a person ceases to be employed, whether it be voluntary or in other circumstances such as redundancy, it is important to review superannuation.

Generally, simply terminating employment will not be sufficient to get access to preserved superannuation benefits. Preserved benefits may only be accessed if a 'condition of release' has been met. Conditions of release include:

• Retiring from the work force on or after reaching 'preservation age' (currently 55),
• Reaching 65 years of age,
• Death, permanent disablement or on diagnosis of a terminal illness,
• In limited cases, on compassionate grounds or severe financial hardship.

Preserved benefits can also be accessed from preservation age where the benefit is to be taken as an income stream (a pension), even if not retired. This is known as 'transition to retirement'. Where employment has ceased, there may be a number of options available in relation to accumulated superannuation benefits.

In many cases it may be possible to simply leave superannuation in the fund to which the former employer was contributing. In other cases it may be prudent to move the super to another fund. This is referred to as 'rolling over' super.

When considering the options, it is vital to take into account a number of important issues such as:

• Can I remain in my current fund?
• If I 'rollover' my super to another fund, what fees and charges will I pay?
• If 'rolling over' to another fund, will I receive better investment options and other benefits?
• If I 'rollover' to another superannuation fund, will I lose my insurance cover?

Many super funds include life insurance cover for their members. If you move from one fund to another, it may not be possible to replace the life insurance cover. For this reason, it is extremely important to talk to us before transferring accumulated superannuation benefits from one fund to another.

If you would like to review your superannuation, please call us on (02) 8268-2900 or send us an email.

(Source: Peter Kelly - Professional Investment Services - November 2008)