“From a processing perspective these have to be done in ‘real time’. The transactions have to be treated as a singular transaction because they will have different components pulled out throughout the year, and you have to calculate the components of them at each withdrawal stage, meaning you can't get around processing them as individual events.”

However, Johnston said there is a way to lessen the burden of the process from a documentation perspective.

“At the start of the year, the member can instruct the trustee that their payments are to be processed in a specific order,” he said.

“Firstly, you would take it from minimum pensions, then lump sums from accumulation then partial commutations from the accumulation account. That would allow you to do one set of documents, usually at the start of the year, because they must be done before the lump sums start coming out, or at least the decision has to be made to treat it this way before the lump sum starts coming out. Then you can just do one set of documentation for the whole year.”

He added there may be some instances where the order can be reversed, such as if the member is taking lump sums from accumulation from second to last, and if they are making regular contributions for which they are going to claim a tax deduction.

“Otherwise, you've got to get your section 290 notices in and your acknowledgements done as you're getting those contributions in every time before you take the next lump sum,” he said.

“The other time you might think about doing it in a slightly different order is if your tax components are more favourable in your accumulation account. You might want to commute some of that pension so that you can maintain that tax-free component within that accumulation balance and use that to start a future pension.”