Q: I am 60. I am interested in the condition of release relating to turning 60 and resigning. Is it sufficient to satisfy the ’turning 60 and resign’ condition of release by changing my employment arrangement from full-time to part-time, with the same employer?
A: Most super benefits are preserved until retirement, or until the individual satisfies another condition of release such as turning 65, or starting a transition-to-retirement pension (TRIP, also known as a TRIS).
A relatively unknown condition of release is where a person is aged 60 or over (but under the age of 65) and they cease an employment arrangement. In these circumstances, the person can be considered ‘retired’ for the purposes of accessing super benefits. If the same employment arrangement continues however, then turning 60 on its own is not considered a condition of release.
The question you ask is whether shifting from full-time work to part-time with the same employer is considered cessation of an employment arrangement, and hence ‘retired’ for the purpose of accessing super benefits. If the answer was yes, then a 60-year-old individual in these circumstances could access their super benefits without the need to retire from the workforce, or without the need to start a TRIP.
If the answer however is ‘no’, then a 60-year-old individual who remains with the same employer can only access super if they satisfy another condition of release such as retiring, or turning 65, or starting a TRIP.
According to the ATO, reducing your hours of work with the same employer, when you are aged 60 or over, rather than resigning or retiring, is not sufficient to satisfy this special condition of release.
For more on the superannuation preservation rules, see the following SuperGuide articles:
- Retirement Age Reckoner: Discover your preservation age and Age Pension age
- Accessing super: What is my preservation age?
- Accessing super: Preservation age moves to 59 years
- Age Pension age increasing to 67 years (not 70 years)
- Age Pension age now 65.5 years (66 years from July 2019)
- The super challenge: At what age should I retire?
- Accessing super early: 14 legal ways to withdraw your super benefits.