NewsBite

Opinion

John Wasiliev

At last, Labor has a plan for legacy pension exits

After years of delay, the federal government has produced regulations that will release retirees from restrictive legacy pensions.

John WasilievColumnist

Subscribe to gift this article

Gift 5 articles to anyone you choose each month when you subscribe.

Subscribe now

Already a subscriber?

Q: You recently provided a response to my question about a $1.8 million term-allocated pension (TAP) in an SMSF. I am trapped because the superannuation rules for legacy pensions have prevented me from rolling this to an industry fund and closing my SMSF. I understand the government has just announced it will legislate a change to the rules. If you recall I’m 74 and the pension, which is just within my transfer balance cap, has a term based on me reaching 100 years and is part of my $4.3 million total super balance. How might what the government is proposing affect my situation? Graham

A: In May 2021 the then Coalition government announced that holders of legacy pensions like yours should be given the option of quitting them under a two-year amnesty that would allow any balances to be returned to an accumulation account. Once there, they could be withdrawn from the super system or converted to an account-based super pension if you had space within your transfer balance cap, which dictates the sum of super you are allowed to have in a tax-free retirement pension.

Loading...
John Wasiliev is a veteran SMSF specialist and has provided answers to readers' questions on superannuation for decades. Have a super question you'd like answered? Email John at superquestions@afr.com

Subscribe to gift this article

Gift 5 articles to anyone you choose each month when you subscribe.

Subscribe now

Already a subscriber?

Read More

Latest In Superannuation & SMSFs

Fetching latest articles

Most Viewed In Wealth

    Original URL: https://www.afr.com/wealth/superannuation/at-last-labor-has-a-plan-for-legacy-pension-exits-20240924-p5kd4u