Deferred Benefit

What is a deferred benefit?

If you are a member of the State Superannuation Scheme (SSS), State Authorities Superannuation Scheme (SASS), or the Police Superannuation Scheme (Police), and leave the public sector, you have the option to retain your superannuation benefit within your scheme until you reach retirement age.

Retaining your benefits within the scheme is called 'preserving' or 'deferring' your benefit. It generally means that you can keep your accrued benefit rights and receive a larger employer financed benefit.

How do I know if I have a deferred benefit?

It is likely you have a deferred benefit if:

• you are not actively contributing to your SSS, SASS or Police account;
• you have not started your pension; or
• you have not withdrawn your benefit from the scheme.

Deferred Benefit - SSS

SSS is a defined benefit scheme that pays pensions, lump sums or a combination of the two. By deferring your benefit you have preserved these pension options. 

Accessing your benefit

Once you reach age 55, you have the opportunity to start your pension. 

Conditions on the type of benefits you can access do apply, but for many deferred members this represents an excellent opportunity to access additional income while you are still working and to accelerate your retirement savings by utilising salary sacrifice strategies. However, it’s important that you speak with your financial planning team at SSFS to make sure you’re not missing out on opportunities which come from having a deferred SSS benefit.

Deferred Benefit - SASS

The State Authorities Superannuation Scheme (SASS) generally pays a lump sum benefit on retirement. 

As a deferred benefit member, you should be aware of three main issues.

Investment choice

SASS offers members four Asset Allocation options. These range from a conservative Cash option (100% cash) to a more aggressive Growth option (21.1% defensive, 78.9% growth assets). If you don’t make an investment choice, the automatic investment choice default is the Growth fund, the most aggressive investment strategy. For deferred benefit members, this investment choice applies to your benefit including your Employer Financed Benefit and Personal Account Balance. It does not apply to your Basic Benefit.  It’s important you consider your risk tolerance to market ups and downs, how long until you retire and the importance of diversifying your funds across different assets and asset classes. Your SSFS Financial planner can provide you with the decision support you need to help ensure your asset allocation strategy is appropriate to your circumstances.

Options at age 58

Recent NSW State Government legislation means that once you reach age 58, you can now elect to remain in the SASS scheme as a deferred member, or have your deferred benefit transferred to any complying superannuation fund.

For many people, this represents an excellent opportunity to review your superannuation position and your long-term financial goals. A discussion with a financial planner at this time can be extremely valuable.

Transition to retirement income streams

If you have not permanently retired from the workforce, and plan to continue to work for a number of years, a Transition to Retirement income stream may be an option for you to consider. Our Financial Planners can discuss how you may be able to apply this strategy to your deferred benefit and explain how you may benefit by accelerating your super savings or alternatively cutting back on the hours you are working without reducing your income. Give your local member service team a call on 1800 620 305 to discuss your individual situation.

Deferred Benefit - Police

Deferred benefits paid from the Police Scheme will always be lump sums. The deferred benefit may be significantly larger than the resignation benefit.

Accessing your benefit

The lump sum benefit was calculated on the date of ceasing service and is indexed to the CPI up until the date it is eventually paid. A deferred benefit is payable at any time after reaching age 55.

If you are still working, from age 55 you may be able to use your benefit to fund a transition to retirement income stream. In this case, you may benefit by accelerating your super savings or alternatively cutting back on the hours you are working without reducing your income. 

Our financial planners will help you to understand your options and explain how you may benefit by accelerating your super savings or alternatively cutting back on the hours you are working without reducing your income. Give your local member service team a call on 1800 620 305 to discuss your individual situation.

Related Links

Understanding your scheme
Building your wealth
Member service benefits