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Hazelwood closure - your financial options

The closure of your workplace is likely to bring up some questions. As far as your super is concerned, we have summarized the most common ones for you. 

We encourage you to get financial advice, to make sure you fully understand your redundancy package and your options upon leaving your employer.

We will be conducting group information sessions in the region -- click here for dates and times.

Our financial planners are experts at looking at your overall financial situation and help you make choices to guide you through this time.
Book a financial planning appointment here.

Below, we provide you with a few initial pointers.

What you might like to know

What happens with my super upon retrenchment?

No matter where life takes you, whether you're looking at retirement, thinking about a new job, or deciding what to do next, you can remain with Equip. 

There is no rush to make any decisions with your super at this stage. 

Here is what will happen with your benefit: 

-  Your employer sends your final super contributions to Equip;

-  Your employer usually then advises us that you have left employment in the past month;

-  We will write to you, outlining the options you have with your super;

-  You inform us of your choice if you wish to make one at this stage.

If you do nothing

DB members: Your benefit will be rolled into the MyFuture accumulation division as a lump sum after 35 days. It will be invested in the Cash option. Your death and total and permanent insurance cover will continue in Equip MyFuture as a fixed amount, and premiums will be deducted from your super account. 

Accumulation members: There will be no changes to your existing super account. Any insurance cover you had will continue as a fixed amount in Equip MyFuture and premiums will be deducted from your super.

What should I do next?

Attend a group session

You can find our scheduled group sessions here.

Book a financial planning appointment

You can book in with one of our financial planners at any time here

Redundancy payment, tax and your super

If you receive a “genuine” redundancy payment, which is typically based on your years of service with your employer, you are entitled to receive a portion of the payment tax free.

The tax free limit for the 2016/17 year is $9,936 plus $4,969 for each complete year of service. 

For example, if you have 15 years of service, your tax free portion would be:

$9,936 + (15 x $4,969) = $84,471

On top of the tax free portion, there is a concessional tax treatment on employment termination payments (ETPs) up to a cap of $195,000.

The tax on this portion depends on whether you have reached your preservation age:

- If you are 56 (i.e., you have reached preservation age), the tax would be 15% (plus Medicare levy)

- If you are under 56, the tax would be 30% (plus Medicare levy)

The tax above the $195,000 cap is 47% (plus Medicare levy).

The redundancy payment can only be paid into super as a personal (after tax) contribution. Through the end of the 2016/17 financial year, the cap for after tax contributions is $180,000, or $540,000 when using the three-year bring forward rule. This limit may change in the 2017/18 financial year to $100,000 p.a., or $300,000 when using the three-year bring forward rule. 

I have a new job

If you have landed a new job, congratulations! That’s fantastic news.

You can stay with Equip for life no matter who your employer is. It’s easy – find out more here.

Depending on your age, you may also be able to use a transition to retirement strategy, which will allow you to access your super while still working. 

I am looking for a new job

While you’re looking for a new role, you can leave your super benefit with Equip, regardless of your situation. 

Any insurance cover you had while you were with your old employer will continue as a fixed amount in Equip MyFuture and premiums will be deducted from your super.

Once you find new employment, you can stay with Equip for life and have your new employer contribute employer contributions into your existing Equip account. Find out more here.

Depending on your overall personal financial situation, you may be eligible for Newstart.

Can I access my super?

You generally can’t access your super unless you are at least 56 during the 2016/17 financial year and have retired, or older than 60. There are some circumstances which allow you to access your super savings early; however, these generally apply to medical conditions and severe financial hardship.

Upon retrenchment, if you have any non-preserved benefits in your super, you may be able to access these benefits at any age. Tax may apply on withdrawal, especially if you are younger than 56. 

You can check whether you have non-preserved benefits by logging into your account on the secure website, by checking your last annual statement or by calling our Member Services Team at 03 9248 5923.

Need financial advice? Book an appointment here

I would like to retire

Depending on your age and your personal circumstances, you may be able to retire and convert your super into a pension, providing you with a regular income.

To start a pension, you must have reached your “preservation age”, which means:

·         You must be at least 56 years old in the financial year 2016/17.

·         If you are under 60, you must have also permanently ceased employment.

Equip offers a variety of retirement products. Get more information here.

A note on tax

If you are between 56 and 60, your pension income will be taxed at your marginal tax rate minus 15%. If you take out a lump sum, you can take out up to $195,000 tax free.

Once you are 60, any pension income or lump sum payment is completely tax free.

For financial advice, speak to our experts and book an appointment here

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Hazelwood closure - your financial options

19.10.16  |   2 min duration

Find out more about what you need to know about your super after retrenchment.

Redundancy and your super
How long will your super last? Check the MyFuture calculator