Defined Benefit Super Fund

I’m getting close to retirement and have a defined benefit superannuation fund. How do I know if I’m making the most of it?

Defined benefit (DB) superannuation funds can be valuable, but they also work very differently from standard accumulation-style funds. Your final benefit is generally based on a formula that could involve your years of service and final salary, or other calculation methods, rather than your contributions and investment performance.

As you approach retirement, decisions like whether to retire early, take a pension or lump sum, or how long to continue working can all affect your financial outcome. These funds can have generous entitlements, but they may also have complex tax implications, especially if you’re entitled to multiple benefits or have other superannuation. It’s also important to understand how the fund interacts with your broader retirement strategy. Because the rules can vary widely between funds, seeking advice is essential.

Your financial adviser can help you evaluate your options, model potential outcomes, and determine the best strategy to maximise your entitlements while managing tax and longevity risks.