When a beneficiary first becomes a recipient of a reversionary pension a few items need to be considered.

• As the pension is continuing, it must satisfy the minimum pension payment obligations in the year of the primary pensioner’s death. The exemption from this obligation only applies for a pension that is not reversionary.
• The minimum pension percentage applicable to the beneficiary is not applied until the following year.
• Even though the pension account balance at date of death does not affect the beneficiary’s transfer balance account for a year:
  • a TBAR must be lodged within 28 days of the quarter of the primary pensioner’s death and
  • the beneficiary’s total super balance will include the balance of the reversionary pension at the next 30 June so may affect their contribution options.

It’s important to make the distinction between the timing of the transfer balance cap and the total super balance affect.

On another matter, please take this opportunity to view our SMSF vs Large APRA Super Funds animated video on You Tube. You may find it useful to share with prospective SMSF trustees.