- Technically Speaking
- Pension
Choosing between a reversionary and non-reversionary pension is an important part of SMSF death benefit planning.
The choice affects how a pension is dealt with when a member dies, who may receive the benefit and how much flexibility the trustee and beneficiary have after death.
This bulletin explains the key differences between reversionary and non-reversionary pensions and how each operates before and after death. It covers the income tax, minimum pension, exempt current pension income and tax component consequences of each structure.
The bulletin also considers the transfer balance cap consequences for a surviving spouse. This includes the timing and value of the transfer balance account credit, the 12-month deferral that applies to a reversionary pension, and the steps a beneficiary may need to take where the death benefit pension would cause them to exceed their personal cap.
Complimentary CPD available for Technically Speaking
1 CPD hour for bulletin OR webinar, subject to passing quiz.
The SMSF Association Technically Speaking is worth 1 CPD hour (SMSF Association accredited) and 1 legislated CPD hour under the Technical Competence, Regulatory Compliance and Consumer Protection, and Tax Financial Advice categories.
Complete the quiz located at the end of your reading and achieve a score of 80% or more (4/5) to be awarded your CPD hour.
Disclaimer: Technical Papers contain factual information only and are prepared without considering particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. The information contained in this document does not constitute advice given by the SMSF Association to you. If you rely on this information yourself or to provide advice to other persons, then you do so at your own risk. The SMSF Association is not licensed to provide financial product advice, legal advice or taxation advice. We recommend that you seek appropriate professional advice before relying upon the information in this technical paper. While the SMSF Association believes that the information provided is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this paper is not considered financial advice for the purposes of the Corporations Act 2001. © SMSF Association