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You can start receiving regular payments from your super before you retire, as you transition to retirement (TTR), using the APSS Pension, provided you have reached your preservation age and are still working. You might want to do this if you want to reduce your working hours and maintain your income, or boost your retirement savings before you retire.

If you’re an employee member , you can use up to 50% of your APSS Defined Benefit to open your APSS Pension as part of your TTR strategy. But first you must use up any balance/s you have in a Member Savings account. Also, be sure to understand the implications of doing this as explained under the warning note below.

Example

Pete is 59 and is nearing retirement and his Defined Benefit is $214,500. He also has Member Savings of $50,000.

Before he retires, Pete wants to open an APSS Pension, and get income payments of $10,000 a year for five years. To achieve this, Pete completes the APSS Pension application form in the Your APSS Pension Product Disclosure Statement (PDS) to invest about $120,000 in his APSS Pension account. This will mean his yearly income of $10,000 is between the minimum and maximum amounts allowed by the Government as explained in the Your payment options of the PDS.

Pete uses the $50,000 in his Member Savings account, plus $70,000 from his Defined Benefit. The maximum amount of his Defined Benefit that he could have used would be $107,250 (50% of the Defined Benefit in accordance with APSS Rules).

An Offset account is also set up with an opening balance of $70,000. This Offset account balance starts attracting interest at the rate applicable to ‘other offset accounts’. This account will increase (or decrease) due to interest earned or charged based on the Investment return of the assets that Australia Post and Associated Employers rely on to be able to pay Defined Benefits.

When Pete retires in 5 years, the balance of his Offset account (i.e. the $70,000 that Pete accessed early plus compounding interest) will be deducted from his Defined Benefit.  

Warning! If using your Defined Benefit to transition to retirement

If you are an employee member, you may be able to access some of your APSS Defined Benefit early to transition to retirement. If you do so, an other offset account will be opened automatically for you. The amount that you take early in pension payments will be deducted (offset) from your ultimate Defined Benefit payment, but interest is also applied. This means you will ‘owe’ more than just the amount of Defined Benefit you take early. Think of it like a loan account secured against a house, except the ‘house’ in this case is your Defined Benefit. 

It’s very important to understand the effect of the interest that is applied. Because it is compounding interest, an APSS other offset account may actually grow faster than a Defined Benefit if the interest rates applied are high enough, It is possible that this could leave you with no Defined Benefit in the future.

We’ve prepared a fact sheet to help you understand how other offset accounts work, primarily for members using their APSS Defined Benefit to transition to retirement or thinking about it. Go to the fact sheetsOpens in new window section of this website and download the fact sheet headed Using your APSS Defined Benefit to transition to retirement for details.