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.”
Market Linked pensions are non-commutable. What happens with these?
Perhaps Graeme, this is a good opportunity for those receiving flexis to convert them to ABPs. They are fully commutable after all.