Minimum requirements for pension compliance may change following the commutation of pensions and the implementation of the $1.6m pension transfer cap. This is relevant for you if you are in, or you are approaching the pension phase. If you have savings spread across both pension and accumulation phases you will need an appropriate strategy for drawing down from your super fund account(s).

The adjustment to your pension’s composition resulting from the implementation of the $1.6m pension transfer cap may affect the amount of pension you must (or want to) draw from super. For example, if you commute or reduce your pension balance to below $1.6m, it is likely that your minimum pension requirements will decrease. This may give you the opportunity to reduce your pension drawing and retain capital in super, especially if you have financial resources outside your super. You should take into account your overall financial resources and whether your future spending will be funded by pension drawdowns or by other non-superannuation assets.

If you wish to draw down an amount that exceeds the minimum pension requirement, you will need to decide whether to draw it from your pension account or from your accumulation account. In these circumstances, there may be tax advantages in drawing faster from one account in preference to the other.

Reviewing your pension strategy will help you to avoid drawing more than the required capital from your super, which will reduce the amount in this concessionally taxed environment. Further, drawing from an incorrect account (accumulation or pension) may result in increased exposure to tax on earnings in super, and to your death benefits tax.

If you need assistance in reviewing your pension strategy or for advice on any other aspect of your super arrangements, please email geoffreyf@brentnallsnsw.com.au or contact BNSW Planning on (02) 8252 5555.

BNSW Planning Pty Limited, a wholly owned subsidiary of BrentnallsNSW Pty Ltd, holds a limited Australian Financial Services (AFS) licence and is fully compliant under 2016 legislation governing the delivery of super and SMSF advice by an accounting firm. For further information, please view our Financial Planning series of articles:

• 2016 brings regulatory changes to advice on super – What’s the buzz?
• Don’t get caught out by super advice changes
• BrentnallsNSW super solution

Related Links:
2017 Superannuation Reforms Video Presentation & Handout

The information and advice provided is general advice only. It has been prepared without taking into account any of your individual objectives, financial situation or needs. Before acting on this advice you should consider the appropriateness of the advice, having regard to your own objectives, financial situation and needs. Neither BNSW Planning Pty Ltd as Corporate Authorised Representative of Akambo Pty Ltd trading as Accountants Private Advice (AFSL 322056) nor its authorised representatives make any representation or warranty as to the accuracy, reliability or completeness of material in this site, or in sites linked to this site. Except to the extent that liability under any statute cannot be excluded, BNSW Planning Pty Ltd as Corporate Authorised Representative of Akambo Pty Ltd trading as Accountants Private Advice (AFSL 322056) nor its authorised representatives do not accept any liability (in contract, tort, negligence or otherwise) for any error or omissions in this material or for any loss or for any loss or damage (direct, indirect, consequential or otherwise) suffered by any person.