The main purpose of the compulsory superannuation regime is to provide retirement benefits to members and their dependants. The Superannuation Industry (Supervision) Act 1993 (Cth) and Superannuation Industry (Supervision) Regulations 1994 (Cth) therefore require certain superannuation benefits to be preserved until members retire from the workforce.
Benefits that must be preserved
Under the main preservation rules, the following must be preserved:
- all contributions made from 1 July 1999
- investment earnings accruing in a regulated superannuation fund
- most compulsory employer contributions and related investment earnings paid into a superannuation fund after 1 July 1992
- some award superannuation contributions paid into a fund for the benefit of employees, at least until the termination of their employment with a contributing employer.
When can preserved benefits be paid?
The preserved benefits are usually paid only when a member retires from the workforce on or after reaching the preservation age.
The preservation age
For members born before 1 July 1960, the preservation age is 55.
For members born after 30 June 1960, the preservation age rises progressively to age 60 for those born after 30 June 1964.
Benefits that need not be preserved
Most undeducted employee contributions (that is, voluntary contributions by the employee on which no tax deduction has been claimed) paid into a fund before 1 July 1999 need not be preserved.
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