No doubt you have already heard about the introduction of a $1.6 million transfer balance cap from 1 July.
When most people see that figure, they think of the asset balance in their account based pensions.
But did you know that this ‘transfer balance cap’ also includes a notional value for every income stream you receive via the superannuation system?
- lifetime pensions, including the majority of defined benefit pensions commenced at any time (eg. Commonwealth or State Government defined benefit pensions)
- Complying lifetime annuities
- Complying life expectancy annuities and pensions
- Term allocated annuities and pensions (ie Market linked pensions).
It is important to remember that if you have a defined benefit pension you may need specialist advice to ensure that your account based pension/s are reduced by enough to bring you under the cap.
Therefore, please contact us immediately if you have one of these income streams, and/or have one or more account based pensions totalling $1.6m or more in value, and would like us to review your situation.