Do you have reversionary pensions in place between you and your spouse within your super fund? Make sure you understand how this can impact your transfer balance cap and what you can do to avoid exceeding the cap.
When you start a pension you add to your transfer balance account. You can only add (transfer) $1.6m over your lifetime into your transfer balance account.
An important point to consider here is that when you become entitled to receive a reversionary pension from your spouse, you are adding to your transfer balance account. You may need to act quickly to ensure you do not exceed your cap.
This is best illustrated with an example. Let’s say you commence your pension with your entire member balance of $1.5m and shortly after become entitled to an $800k reversionary pension:
As you have commuted the excess over the $1.6m back to accumulation phase you have not exceeded your transfer balance cap. However it is very important to understand that you can only commute YOUR MEMBER BALANCE back to accumulation.
The government is allowing you 12 months from the date of death to get things in order. If you need assistance with this process please contact us here.
|This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs.|