Q: How do I know if I have done everything I need to do ahead of the introduction of the new superannuation rules on July 1?
A: Here is your checklist for June 30:
- Where a member is at risk of exceeding their $1.6 million transfer balance cap, they must request in writing that their trustee commute the excess amount so it is either retained in the accumulation account or paid as a lump sum.
- The Australian Taxation Office has advised that the excess amount need not be specified in the request, allowing further time to attend to necessary accounting adjustments.
- Superannuation trust deeds should be amended in order to ensure that the trustee has adequate power to commute funds from the pension phase account to the accumulation account
- Review any binding death benefit nominations to determine whether a reversionary pension would be payable and the implications if not. Under the new rules reversionary beneficiaries will have a 12-month period to ensure compliance with their cap. This favourable treatment does not extend to non-reversionary pensions.
- Trustees will need to act quickly to determine whether capital gains tax rollover relief is available and appropriate. The relief may allow the cost base of certain assets to be reset if they are transferred from pension to accumulation phase in order to comply with the new rules.
David Coombs is a partner at Gadens.