ATO director of technical leadership Helen Morgan says from a transfer balance cap perspective, transition to retirement income streams are specifically excluded from being in the retirement phase and, therefore, do not affect the transfer balance cap.
However, Ms Morgan said on the 25 May 2017, the government introduced a bill into Parliament that proposed an amendment to the TRIS rules.
“Under the proposed changes to the law, after 1 July, if you’re in receipt of a TRIS and you reach age 65, your TRIS will automatically be treated as being in the retirement phase,” she explained.
“A transfer balance account will be created for you with a credit allocated at the value of the remaining entitlement from your TRIS.”
Ms Morgan clarified that if a member is younger than 65 and they have satisfied another condition of release such as retirement, a terminal medical condition or permanent incapacity, it won’t be converted into an account-based pension until they advise their superannuation income stream provider.
“Your TRIS will then be in the retirement phase. A transfer balance account will be created and credited with the value of your remaining TRIS entitlement,” she said.
Ms Morgan also confirmed that the credit with the remaining value of the TRIS will be applied on the date that the member notifies the fund that they have satisfied a condition of release.
[quote=Gerry V]Refer also to previous article on commuting a TRIS on the 1/7/2017 and having to pay 1 day pro rata of pension payment for 17/18. It is not possible to know what the value of the pension amount is at that point and not permitted to go below 4% or over 10%. How is this done, and it must be paid on the 1/7/2017 as well?[/quote]
What happens to those that are in receipt of a TRIS pre 1st July 2017 and are over 65 – do they automatically convert also?
As per industry practise for the last ten years the so called new rules have to apply too. Otherwise you will have thousands of past TRIS clients that met a condition of release and have drawn more than 10%. So it would be insane for the conversion to ABP to not have occurred in the past.
But as per this insane government, nothing has been done well or efficiently with these big super changes. ODwyer and her mob have caused so much distrust with super it’s a complete farce.
Refer also to previous article on commuting a TRIS on the 1/7/2017 and having to pay 1 day pro rata of pension payment for 17/18. It is not possible to know what the value of the pension amount is at that point and not permitted to go below 4% or over 10%. How is this done?
Suggest you commute on 30 June 2017 instead.
Finally some common sense seems to be prevailing.
It would be great if the Tax Office, as the regulator of SMSFs, realised that there is also super law to be considered and, it isn’t all about tax collection.
Where has APRA been during this shambolic rollout of major super reforms?