Retrenchment checklist: what to do and when
When you are considering your retrenchment options, prioritising your tasks is essential. Knowing what you should do now and what can wait a while, can help take some of the pressure off.
Things to do now:
Cash flow management
Your retrenchment payment is a limited amount, so making the most of this payment is important. Here are some tips to help you:
Park your funds
While it may be tempting to spend some of your retrenchment payment on paying off debts or purchasing new items, you should remain as financially flexible as possible during this period of transition, while you consider the next steps in your life. Consider placing unused leave, long service leave and tax-free retrenchment payments into a cash management account that offers a regular payment facility (this acts like income).
Do a budget
Preparing a budget will give you an idea of the cash reserves you are likely to need in the coming months. Use our Budget planner and remember to take into account the length of time it may take you to find new employment and include any Centrelink payments you may be entitled to.
Get the right advice
Telstra Super Financial Planning offers expert financial planning advice with the aim of developing a financial strategy suited to your needs. To discuss your advice needs, please call 1300 033 166 between 8.00am and 5.30pm (Melbourne time) Monday to Friday.
You may be eligible to receive Centrelink income assistance under one of the following programs:
- Newstart - if you are looking for work
- Age Pension - if you plan to retire and have reached the relevant age.
Waiting periods may apply to these programs, so you should contact Centrelink as soon as possible to get the right information. Contact Centrelink online or call 13 28 50 (Employment Services) or 13 23 00 (Retirement Services).
Things to do within 30 days: insurance
Telstra Super Personal Plus
If you are a current Telstra Super Personal Plus member and you are retrenched from your current employer, your death insurance cover, if applicable, continues unchanged. If you have TPD and/or income protection cover your cover will not be interrupted provided you are continuously employed.
If you are being retrenched from Telstra or a subsidiary company, your super is automatically transferred to a Telstra Super Personal Plus account and your insurance arrangement will be different to that of your previous Telstra Super arrangement.
For detailed information on what happens to your insurance cover when you leave your employer, read the Telstra Super Personal Plus Insurance Guide.
Things to do within 60 days:
Employee Share Ownership Plan (Telstra employees only)
You have 60 days to provide instructions regarding your shares. If you have Telstra shares under the Employee Share Ownership Plan, it is up to you to contact the share registry, Link Market Services and provide instructions for your shares within 60 days from when you finish employment with Telstra. If you don't provide instructions, your shares will be automatically sold to repay the debt that may have been incurred since purchasing.
Special arrangements exist for the 1999 share offer due to the purchase price being lower than the current share price - speak to the registry about your options on 1300 303 199.
Things to do within 90 days:
Make a decision about your super
Ideally you should organise your super within 90 days of being retrenched. Basically you have three options for your super benefit:
1. Stay with Telstra Super
If you are a member of Telstra Super Personal Plus you can stay in your arrangement and have your next employer contribute into your Telstra Super account. Request an Employer Contribution Kit online.
If you are employed by Telstra, when you change employers, your super is automatically transferred to Telstra Super Personal Plus. Telstra Super will send you all the information you'll need about Telstra Super Personal Plus including a product disclosure statement and also details of how your benefit was calculated under your previous Telstra Super arrangement prior to being transferred into Telstra Super Personal Plus.
As a Telstra Super Personal Plus member, you will continue to enjoy competitive administration fee of $1.50 per week plus indirect administration fee of 0.22% pa (including government levy).
Review your investment choice
Many people choose an investment option when they first join a fund and may not think about it again until retirement. But as your circumstances change, your investment needs may also change. Now is a good time to review your investment strategy in light of your retrenchment and ensure that your investment needs are still being met.
Visit our Investment pages for more information about available investment options.
2. Roll over your super benefit into another super fund
If you choose to move once your benefit is transferred, you will need to complete a Super Benefit Instructions form. Complete a Super Benefit Instructions Fund Transfer form to transfer your super to an industry, corporate or retail fund, or complete a Super Benefit Instructions Self-Managed Super Fund form to transfer your super to a Self-Managed Super Fund. After we receive the completed form your benefit payment will be processed promptly according to your instructions.
3. Withdraw your benefit
Depending on how long you have been working and contributing to your super, you may have some funds available that are classed as non-preserved super amounts. While you can access these funds, it's important to carefully consider the impact this will have on your retirement income, particularly given that income from super is now tax-free from the age of 60. Retaining your money in super can be:
- tax effective
- favourable regarding Centrelink eligibility
- effective at boosting your retirement savings.