The 54/11 Option
If you choose to resign at least two calendar days before your 55th birthday*, and apply for your CSS retirement benefit, your benefit will be calculated differently than if you wait until after you turn 55 to retire. This is commonly known as the 54/11 option.
What does 54/11 mean?
54/11 refers to ceasing employment shortly before 55, electing to defer your CSS benefit, and claiming a deferred benefit on or after age 55.
How does 54/11 work?
To apply the 54/11 deferred option, you’d typically choose to resign from your job at least two calendar days before you turn 55*. In doing so, you’re able to elect for your CSS benefit to be preserved and you defer claiming it until after you turn 55.
Your deferred benefit is then used to determine your CSS entitlements. An indexed pension is calculated as 2.5 times your accumulated basic contributions multiplied by an age-based pension factor. In other words, we don’t use your salary to calculate your pension once you’ve retired or resigned like we would if you were taking a regular age retirement. You may also be able to take your accumulated member and productivity contributions as a lump sum, or convert them to a non-indexed pension.
Jo is planning for retirement. She is about to turn 55 and is considering her options, she can – leave a few days before her 55th birthday, preserve her benefit, then claim her benefits using the deferred calculation immediately from the day she turns 55. She can otherwise continue working until she turns 55, and any time on or after her 55th birthday she can retire and claim her benefits immediately using the age retirement calculation.
If you leave work by taking a redundancy you may also be eligible to choose the deferred benefit method regardless of your age. If you’re over 55 and take a redundancy, you have to defer your benefit for at least one day before you’re eligible to claim.
Who is it for?
Contributing customers of CSS under the age of 55, or CSS customers aged 55 and over who leave work through redundancy.
What if I retire after 55?
If you choose to continue working and retire at or after age 55, your indexed pension is calculated using a percentage of your final salary. This percentage is based on your age and years of contributory service. You may also be able to take your accumulated member and productivity contributions as a lump sum, or convert them to a non-indexed pension, but this pension amount will be capped depending on your final salary and your age at claim.
Is the 54/11 option right for me?
Your individual circumstances will dictate whether the deferred option is right for you. As the benefit calculations are different if you choose to defer, we recommend requesting benefit estimates for both scenarios well in advance of your 55th birthday.
You may also want to talk with a financial planner to learn more about the options available to you, and read our Retiring and claiming your CSS benefit factsheet.
- If you pursue the deferred option, you might consider paying supplementary contributions prior to resigning or retiring. You can learn more in our Contributing to CSS factsheet
- There are different tax components to your CSS benefit, which you can learn more about in our Tax and your CSS super booklet.
Have some questions?
54/11 is a big decision, and we’re here to help.
Call us on 1300 000 277 or email email@example.com.
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