Under the SuperLife workplace savings scheme, when you become entitled to a benefit, you can choose a combination of:

The options let you choose when and how you will receive payment of your benefit. Taking part of your benefit as a cash payment, to meet your immediate needs, and deferring the balance for later when you need it, makes a lot of sense. In retirement, using the manged income option is a very efficient way to convert your savings into regular income. To help you make a decision, you should read our 'Thinking about your retirement' guide.

 

What do most members do?

Most members choose to take an immediate lump sum. This is part of the “Kiwi way”. Taking the cash is a good idea if you intend to spend it immediately, or use it to pay off debt, e.g. a mortgage.

However, in many cases deferring payment or taking a managed income, or a combination of both, may be better. This is because if you withdraw your benefit as a cash payment, you have to decide how to invest it. So why not leave it in SuperLife and take what you need when you need it? Even if you want the safety of bank deposits, using the SuperLife Cash Fund may be a better option.

Even if you intend to spend your benefit in the next year, there may be advantages in keeping it in SuperLife until you need it, and changing your investment strategy to the Cash Fund. 

 

Continuing your membership

While you remain a member, you can:

  • Continue to make regular contributions and/or lump sum contributions, but you don’t have to.
  • Continue to choose and change as you wish the investment strategy that applies to the balance of your savings accounts.
  • Choose to continue, change, or stop any insurance benefit and have your insurance premiums paid out of your savings account.
  • Have money paid from your SuperLife workplace savings Account to your KiwiSaver Account.

 

The options in detail

Cash payments

If you choose to take part of your benefit as a cash payment:

  • Your benefit will be paid to you as soon as possible after your request
  • You can continue with SuperLife, or rejoin it later, for your future savings needs.
  • You can also still choose to continue your insurance benefits.

To receive a cash payment, you need to complete the withdrawal payment request form. If we do not hold identity and address verification, you will be asked to provide that information as set out here.

 

Managed income

The managed income option lets you withdraw money on a regular basis, e.g. $2,000 a month. A managed income is particularly useful when you want a regular income, in retirement.

If you choose the managed income option, you can:

  • Decide on the level of your regular income.
  • Change the amount of the regular income at any time.
  • Choose the day(s) of the month the regular income is paid.
  • Take out additional amounts whenever you wish.

Under a managed income, because of the regular payment, it is often a good idea to review your investment strategy regularly. We suggest that 2 to 3 years’ expected payments are held in cash. Also, as your cash level goes down, it should be occasionally topped up (e.g. once a year), by switching money in the other Pools to cash. You should seek advice on what is the appropriate investment strategy for your requirements. 

The managed income is not taxable income in your hands. As with other withdrawals from superannuation schemes, the amounts you receive are tax-paid. Also, the managed income does not affect your entitlement to New Zealand Superannuation. However, for the purposes of any income test under The Social Security Act 1964 (such as the “young spouses” entitlement to New Zealand Superannuation), the managed income will probably count as income. This applies if your spouse is under age 65 and does not work. You need to seek advice on this, if it could apply in your case.

Further details are set out in our 'Managed incomes' article.

To choose the managed income option, complete the managed income request form.

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Legal stuff

This is not a product disclosure statement for the purpose of the Financial Markets Conduct Act 2013. A product disclosure statement is available from SuperLife free of charge. Before making a decision to take a benefit, you should consider whether you need to seek financial advice. If you wish to have personalised financial advice, you should talk to an appropriately experienced Authorised Financial Adviser.