You don’t have to withdraw your savings when you leave Police. You can choose to remain in the scheme as a retained member. It’s a good option if you’re happy with the way your savings are invested and don’t need them straight away. You won’t be able to make contributions, but you will continue to receive investment returns. You can change your investment strategy at any time.
The PSS has a number of features that make it attractive for members who want to leave their money in the scheme when they retire. The scheme is a portfolio investment entity (PIE), which means PSS investment earnings are taxed at rates based on individual members’ incomes. Typically, your income drops in retirement, and you may qualify for a tax rate lower than the default rate of 28%.
Managing your money in retirement
PSS has a facility to set up regular withdrawals so you can effectively pay yourself a monthly pension in retirement. You might find these rules of thumb on retirement spending helpful in setting the payment amount. You can change the amount when you need to.
Conventional wisdom is that the closer you are to needing to draw on your savings, the more conservative your investment strategy should be. That doesn’t mean you need to have all your money invested in a low-risk fund on retirement. At that point, you may need your savings to provide an income for 20 years or more, so you still need money invested for the long term. One approach is to invest money you plan to spend in the near-term in a low-risk fund and money you plan to spend in the longer-term in a higher risk fund or funds. You’ll find information on this approach in Sorted’s guide to managing your money in retirement. PSS is ideal for this strategy. You can split your savings across a number of investment options and nominate which fund you want payments to be made from.
You can access your savings at any time by completing the retained member withdrawal form.
- Regular withdrawals. You can set up a regular withdrawal paid to your bank account on the 20th of each month. There is no set-up or benefit payment fee for regular monthly withdrawals. If you have this facility set up, you need to maintain a minimum balance of $1,000.
- One-off withdrawals. A one-off withdrawal must be at least $5,000, and you will need to pay the standard benefit payment fee for each withdrawal. Fees are listed here. You must maintain a balance of at least $5,000.
If you’re invested in more than one investment option (except Super Steps), you can nominate which option you want the funds withdrawn from. If you don’t nominate an option, the funds will be withdrawn proportionally from across your investment options.
Becoming a retained member
The leaving form includes a section you can use to let us know if you want to leave your money in the scheme.