Figot said before making a pension reversionary, several factors should first be considered, and first and perhaps most important of those is that an individual must not be doing legal work when reverting a pension unless they add extra facts.

“If you just said this person arranged for a pension to be reversionary, that looks like a heck of a lot like legal work,” Figot said.

“Now, that's neutral as to whether or not to make a reversion or a non-reversionary, but it's certainly a factor to think about.”

The next factor is to decide who should receive the pension.

“Not thinking about tax or anything funky like that, but just merely, who do you want to receive the pension?” he said.

“The third factor is administrative efficiency upon death. If you want a very smooth experience upon death, that is in favour of reversion, however, if you want to ensure that the smallest amount of money leaves the fund, in that case, you probably want it to be not reversionary. The older someone gets, the more that plays a role.”

He continued that if the goal is to maximise the exempt current pension income, he believes that too is a more neutral factor.

“Sometimes there are some circumstances, on balance, where I think having it reversionary probably maximises exempt current pension income,” Figot said.

“I can also think of some circumstances where having it not reversionary could maximise current exempt pension income. “

The next factor to consider is the date of credit to the transfer balance, which Figot said is again far more neutral than people realise.

Another factor, he continued, is life insurance.

“If there is life insurance, that's where you should make it reversionary.”

“Another factor which people think is related but is not, is the date of addition to total super balance that weighs in favour of non-reversion.”

The final factor to consider, Figot said, is social security benefits and the Commonwealth seniors’ health card.

“That weighs in if your clients care about the Commonwealth seniors’ health card, you want to make that pension reversionary.”