Natalie Scott, superannuation specialist for Knowledge Shop, said TRIS in pension doesn’t automatically convert to an account-based pension on meeting a condition of release, but once a member does meet a condition of release, there is a new term called TRIS in retirement phase.
“While a member is in TRIS, it doesn’t count towards their transfer balance cap, which means, for example, if a member has $3 million in superannuation, they can start a TRIS with that entire $3 million balance.”
However, she said although they won’t get to claim exempt current pension income (ECPI) or need to consider the $1.9 million transfer balance cap rules, they would need to consider whether they meet a condition of release because the TRIS will automatically convert to a TRIS in retirement phase.
“Once a condition of release is met, and when the TRIS is in retirement phase, they can claim ECPI,” Scott said.
The minimum pension amount, she said, would be based on the member’s age on 1 July or commencement date, and there is no maximum once the member meets one of the conditions of release.
“A lump sum can be paid from a TRIS once the member has met a condition of release and that can be reversionary. It doesn’t automatically convert to an account-based pension, though.”
“When you’re in a TRIS, it’ll always be a TRIS, but it’ll be in a retirement-based ECPI. It doesn’t automatically go to an account-based pension. Having said that, there’s not really any difference between a TRIS in retirement phase and account-based pension, so there’s no need to commute back that TRIS and start an account-based pension.”
Scott continued that TRIS in retirement phase will count towards the member’s TBC, and is a reportable transfer balance event.
“You would need to look at the value of the TRIS in retirement phase on the date that the member met that condition of release to work out what that credit would be in their transfer balance account.”
“While a TRIS is a pension, it’s not in retirement phase, so you can’t claim to have current pension income, there’s no reportable transfer balance account, and it’s not subject to the transfer balance.”
