Technically Speaking: Legacy pensions and the transfer balance account

  • Technically Speaking

Part one of a three-part series to support members navigate the complexities associated with legacy pensions particularly in light of new and proposed legislative changes.

From 5 April 2022, new regulations relating to the transfer balance cap (TBC) make it possible to commute excess transfer balance amounts from new SMSF market linked pensions. These changes require the initial commutation of a complying life expectancy pension or market linked pension that existing on 1 July 2017.

This issue of Technically Speaking was written by Julie Steed (FSSA), Senior Technical Services Manager at Australian Executor Trustees and through the use of case studies, focuses on:

• understanding the transfer balance account transactions for clients with legacy pensions

• exploring the changes to the commutation rules for excess transfer balance amounts 

• identifying the threat and avoiding excess transfer balance tax.

 

The contents of this resource are taken to be correct at the time of publication.

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