Question: I am 62 and retired. I have about $2.8 million in super, all of it in a pension income stream. It is close to the $3 million limit because, firstly, my husband died in his 50s, with his super being rolled over to me as a death benefit income stream. Second, I have invested heavily through my industry fund direct investment option in the S&P 500, which has done very well over the past few years.

Once I have over $3 million completely in pension mode, will I still be subject to the Division 296 tax? I have searched for this information but cannot find it anywhere. If my pension fund is taxed, it will mean that my real pension payments will reduce annually (as I will have to move any excess over $3 million so I am not trapped into paying unrealised gains) because of inflation. Julie