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The Rise in the Preservation Age for SMSF Members

The rise in the preservation age for SMSF members has taken effect last 1 July 2015. The preservation age is the minimum age that a member can access their preserved super benefits without satisfying another condition of release.

A member must reach their preservation age in order to start receiving a transition to retirement income stream (TRIS) payment. With the rise in preservation age legislation taking into effect, the age of preservation will now be based on the date of birth of the SMSF member. If born between:

• 1 July 1960 and 30 June 1961, the preservation age is 56 and the earliest that the TRIS payment can start will be on the financial year 2016 – 2017
• 1 July 1961 and 30 June 1962, the preservation age is 57 and the earliest that the TRIS payment can start will be on the financial year 2018 – 2019
• 1 July 1962 and 30 June 1963, the preservation age is 58 and the earliest that the TRIS payment can start will be on the financial year 2020 – 2021
• 1 July 1963 and 30 June 1964, the preservation age is 59 and the earliest that the TRIS payment can start will be on the financial year 2022 – 2023

For those members who were born after the 30th of June 1964, the preservation age will be 60 and the earliest that the TRIS payment can start will be on the 2024 – 2025 financial year.

If a member turned 55 before the legislation has taken into effect, they won’t be affected by the changes. SMSF Trustees must be aware of these changes in order to ensure that payments are not made to unqualified members.

If you would like more information about how this may affect you, please contact our SMSF specialists.

written by:

McKinley Plowman