TRIS strategy tops adviser queries

Clarification around transition to retirement income streams (TRIS) strategies have topped adviser queries, according to BT Advice.

BT Advice Technical’s September quarter round-up showed the top two queries for the September quarter were Australian Prudential Regulation Authority (APRA) guidance around retirement for people aged over 60 including potential impact on TRIS, and TRIS with a reversionary nomination.

However financial advisers now had additional clarity around when clients aged over 60 with multiple employment arrangements may access their preserved super benefits, after APRA updated Superannuation Prudential Practice Guide SPG 280 in June this year.

APRA confirmed that when a member who has two or more gainful employment arrangements reached age 60, they would meet a retirement condition of release if they were to stop any one of these arrangements.

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BT’s Technical consultant, Tim Howard, said: “Given the recent changes to the tax treatment of the earning on assets supporting transition to retirement income streams (TRIS), it is now even more important to consider whether a member can start a retirement phase pension, such as an account-based pension, or convert their existing TRIS into an ABP”.

The second most topical query by advisers was around how a TRIS with a reversionary beneficiary could validly pass to the nominated beneficiary after death.

“Parts of the new super laws and supporting commentary from the ATO point to the reversionary beneficiary themselves needing to satisfy a condition of release at the time of the original member’s death,” Howard said.

“While this is creating a degree of uncertainty from an estate planning point of view, a number of industry participants are currently seeking further clarification on the issue.”