POWERED BY MOMENTUM MEDIA
Market based pensions commutable
The amendment allowing the ability to commute a market linked pension as part of the 2016 Budget changes has been an unexpected surprise for self-managed superannuation fund (SMSF) members, a law firm believes.
Pointing to the Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulations 2017 amendments, Cooper Grace Ward said when advising clients on handling SMSFs, some of the changes were expected but others were not.
The firm's partner, Scott Hay-Bartlem said the amendment that allowed a market linked pension to be partly commuted to remove an excess transfer balance, but only to the extent of the actual or expected excess provided opportunities to commute an otherwise non-commutable income stream.
"…if someone has both market linked and account based pensions and together they result in an excess transfer balance, under this proposed change the market linked pension could be commuted back to accumulation phase to remove even an expected excess leaving the account based pension in place," he said.
"…the ability to commute a market linked pension is an unexpected surprise that will be useful to many people who are otherwise locked into excess transfer balance positions with these old pensions."
Hay-Bartlem said as the amendments allowed the pension term to allow a commutation the first pension terms must be amended to allow for the commutation.
He said this could provide issues depending on the wording of the trust deed and pension terms.
Recommended for you
The impact of identity theft and its threat to superannuation savings were highlighted in a case that went before the Federal Court at the end of 2023.
A recent NSW Supreme Court decision is an important reminder that while super funds may be subject to restrictive superannuation and tax laws, in essence they are still a trust and subject to equitable and common law claims, says a legal expert.
New research from the University of Adelaide has found SMSFs outperformed APRA funds by more than 4 per cent in 2021–22.
The SMSF Association has made a number of policy recommendations for the superannuation sector in its pre-budget submission to the government.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
93.34 3 y p.a(%)
2
Global X GlobalX FANG+ ETF
37.15 3 y p.a(%)
3
GAM LSA Private Shares AU I
33.96 3 y p.a(%)
4
Fidante Credit Suisse Global Private Equity
29.68 3 y p.a(%)
5
Plato Global Alpha A
28.73 3 y p.a(%)
