Warning – Hidden danger in pension income streams

Warning – Hidden danger in pension income streams!

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?

 

This includes:

  • 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.

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