Moving to retirement phase Transition-to-retirement income streams

Date of article: 16 May 2019
Last updated: 16 May 2019

Australian Taxation Office has issued GN 2019/1 to clarify the what happens when a person is on a transition to retirment income stream and retirement occurs.

From 1 July 2017, there have been changes that makes assets supporting a TRIS no longer be eligible for exempt current pension income.

'Retirement phase' is used to identify superannuation income streams that and are eligible for ECPI.

A transition to retirement income stream will move into the retirement phase when the member meets a Nil cashing restrictions condition of release, such as retirement or attaining the age of 65.

A member does not need to commute and restart a TRIS for it to move into the retirement phase.

The TRIS will not cease upon being moved into retirement phase and all benefits will become unrestricted non-preserved benefits, and will no longer be subject to the maximum annual pension payment limit. The TRIS will generally have the characteristic of a retirement phase account-based superannuation income stream. This affects all TRIS, regardless of when they were first started.

Upon moving into retirement phase for the TRIS, the SMSF is required to determine the value of the TRIS account balance at that date, and report the amount as the member's transfer balance cap amount. The earnings from assets supporting the TRIS will be eligible for exempt current pension income.

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