Get App
What are unrestricted non-preserved benefits?
12 Jan 2023
Unrestricted non-preserved benefits are portions of your super fund that you don’t need to meet any conditions to access, so they can be paid to you at any time. Typically though, you will only have this type of benefit if you are retired and have chosen to leave money in your super fund.
So let’s look at the difference between preserved and non-preserved benefits, and other ways to unlock your preserved benefits.
The difference between preserved and non-preserved benefits
By default, the majority of your super fund will be in the form of preserved benefits during your working life, and locked away so you can’t access the money until you meet any condition of release. This is the fund you hope to grow through contributions from your employer or any extra contributions you wish to make that will all help to fund your retirement.
Timothy Collins, a financial adviser at Talem Wealth, told Canstar the superannuation system has two phases: accumulation and pension.
“The easiest way to think about the two phases is to picture buckets,” he said.
“The accumulation phase is a bucket with an open top, you can put money in (within contribution rules), but you generally cannot take money out.
“When you commence a pension phase account you effectively put a lid on that bucket and a tap on the side. You can’t add any more money to that account but you can draw money out as an income stream or lump sum.
“When thinking about restricted/preserved benefits versus unrestricted non-preserved benefits, the simple view is that preserved benefits are stuck in accumulation, whereas unrestricted non-preserved benefits can be withdrawn either through a pension income or as a lump sum.”
In order to access your super fund you need to meet certain conditions of release and have reached the preservation age for retirement. That age is determined by the year in which you were born, and is slowly climbing towards 60 for everyone.
So long as you meet those conditions, the preserved benefits in your super are now unrestricted non-preserved benefits, readily accessible for you to withdraw or to help set up a pension for your retirement.
For example, you may choose to use only part of the money in your super fund to set up an account based pension for your retirement. You will only be able to withdraw from that pension subject to any minimum drawdown conditions, but that will be tax-free if you are over age 60 and retired or over age 65. You can’t contribute any more to that pension fund but you can set up multiple pensions if you like.
You may like to review relevant documents, such as a product disclosure statement (PDS) and target market determination (TMD) that may apply too.
The balance that’s left in your super fund you can still access at any time as that is considered an unrestricted non-preserved benefit.
Other ways to unlock your preserved benefits
There are other ways your preserved benefits can become unrestricted and non-preserved and these include:
- when you reach age 65 (even if you haven’t retired)
- if you become permanently incapacitated
- if you suffer from a terminal condition and are expected to die in two years
- at death
You may also have unrestricted non-preserved benefits from other sources, such as employment termination payments that were rolled into your super fund prior to 1 July, 2004.
While the rules governing if your benefits are preserved or not may seem complicated, it’s easy to find out if you have any unrestricted non-preserved benefits. Just check your latest super fund member statement, and any applicable benefits will be clearly listed as such.
Compare Superannuation with Canstar
The table below displays some of the superannuation funds currently available on Canstar’s database for Australians aged 30 to 39 with a super balance of up to $55,000. The results shown are sorted by Star Rating (highest to lowest) and then by 5 year return (highest to lowest). Performance figures shown reflect net investment performance, i.e. net of investment tax, investment management fees and the applicable administration fees based on an account balance of $50,000. To learn more about performance information, click here. Consider the Target Market Determination (TMD) before making a purchase decision. Contact the product issuer directly for a copy of the TMD. Use Canstar’s superannuation comparison selector to view a wider range of super funds. Canstar may earn a fee for referrals.
Online rollover
Online application
Online rollover
Online application
Online rollover
Online application
Online rollover
Online application
Included
Not included
Not applicable
Data not captured
Canstar Star Rating
Indicative Canstar Star Rating
Cover image source: Michael Leslie/Shutterstock.com
This article was reviewed by our Sub Editor Jacqueline Belesky before it was updated, as part of our fact-checking process.
Try our Superannuation comparison tool to instantly compare Canstar expert rated options.
