Better Super

If you are nearing retirement you will need to review your plans to ensure you are making the most of the opportunities available under Better Super.

This list looks at six key issues you need to be aware of if you are planning to retire in the next five years.

1. Super benefits are tax-free if paid from a taxed source and you are 60 or over. The NSW public sector schemes (SASS, SSS and Police) are all taxed funds. The Commonwealth public sector schemes (CSS and PSS) are hybrid schemes and are made up of taxed and untaxed components. The untaxed component of the benefit will not be tax-free after 60, but will still receive generous tax concessions.

2. It is easier to contribute to superannuation. Up until age 65, everyone is eligible to contribute to superannuation. Between age 65 and 75 you must work 40 hours in a consecutive 30 day period.

3. You can keep your savings in super indefinitely, you should check with your scheme to ensure that there are no scheme rules that may override this provision. If you are not able to stay in your current scheme, it is a simple matter to roll your super to another scheme and remain in the superannuation environment.

4. Employment Termination Payments cannot be rolled over into super. There are transitional provisions that will apply if you had a written contract outlining your redundancy provisions on the 9 May 2006. If you are considering redundancy, you should seek professional advice.

5. Your preservation age will still restrict your access to your superannuation. If you were born before 1/7/60 your preservation age is currently 55, but up to 60 if you were born after 30/6/64.

6. Annual payments from a Transition to Retirement income stream must currently pay between 2% and 10% of your superannuation account balance. You cannot take a lump sum payment under transition to retirement, until you have met a condition of release which typically are that you have retired and are over 55, or that you are over 65.