Treasury called on to clarify confusing pension terms
The Treasury has been asked to provide greater clarification around whether flexi-pensions will be counted towards the transfer balance cap, with the super reforms currently causing confusion.
SuperConcepts executive manager SMSF technical and private wealth Graeme Colley says many years ago SMSF trustees could draw down what was called a complying pension in an SMSF and they were life expectancy pensions that were calculated by an actuary.
“Now, included with those types of pensions which were used mainly for benefit limit purposes, you could start up a flexi-pension,” MrColley said.
“A flexi-pension fitted within the rules but it allowed a lot of flexibility and was able to be used for some of the reasonable benefit limit concessions that were available at the time. Then when the RBLs were abolished in 2007, many of those people still kept their complying pensions because it was not possible to commute those pensions to an account-based pension.”
Mr Colley said Treasury needs to clarify whether flexi-pensions will be included as complying pensions for the purposes of the two balances under the new superannuation reforms.
“We just need some confirmation that flexi-pensions will be included as complying pensions.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.