Super is preserved until a condition of release

Most super is preserved, meaning it must stay in the system until a condition of release set out in the law is satisfied. As trustee, confirmation that a member has genuinely met a condition of release is required before paying a benefit, with evidence kept on file.

Paying a benefit without a valid condition is illegal early access, with the tax and penalty consequences that carries.

Preservation age and retirement

Preservation age is the minimum age at which super can be accessed on retirement. Following a phased increase, preservation age is now 60 for everyone.

Reaching preservation age is not enough on its own; generally retirement is also required, meaning an arrangement under which the person was gainfully employed has come to an end and, depending on age, they do not intend to work again or to work more than a limited amount. For someone under 60, genuine intention never again to be gainfully employed for more than a limited number of hours is required; for those aged 60 or over, ceasing an employment arrangement can itself be enough.

Turning 65

Turning 65 is a straightforward condition of release. Once a person reaches 65, super can be accessed whether or not they have retired and whether or not they are still working.

This makes 65 a useful anchor for planning. Members who are unsure whether they have technically retired can rely on it, and trustees can pay benefits without needing to assess a member's retirement intentions.

Transition to retirement

Between reaching preservation age and fully retiring, members can often start a transition to retirement income stream. This allows access to super as a regular pension while still working, subject to annual minimum and maximum limits on what can be drawn.

A transition to retirement pension does not allow lump sums to be taken freely; access is generally limited to the pension payments within the set range.

Special grounds for early access

The law allows access before preservation age in limited situations, including permanent incapacity, a terminal medical condition, severe financial hardship and compassionate grounds, each with strict eligibility conditions and, in some cases, approval processes administered by the ATO or the fund.

Compassionate release, for instance, is limited to specific purposes such as certain unpaid medical costs or preventing the loss of a home, and must be approved before the benefit is paid.