Important TRIS Changes
Now that the anomaly that would have required a TRIS to be stopped and restarted as a standard pension once a condition of release has been triggered is being removed, we need to consider what this means in the context of the new rules.
Assuming that the announcements will be enacted, a TRIS may convert to a standard pension, subject to the deed and pension documentation, when a condition of full release is met. Where the trigger is the attainment of age 65 the conversion is automatic. If the trigger is some other event prior to age 65 the conversion will only occur once the trustees have been notified. In either case, SMSF trustees are required to lodge a Transfer Balance Account Report, or TBAR, for the member within 28 days of the end of the quarter. This applies from 1 July 18 and only where the fund contains ANY member with a total super balance of at least $1 million across ALL funds as at 30 June 2018.
This ascribes additional importance to the 65th birthday to ensure the reporting requirements are met. We will provide 3 warnings to our alliance partners prior to a member’s 65th birthday (1 month out, 1 week out and on the day) to allow sufficient time to consider this matter. Remember that the total super balance of all members needs to be considered, not just the pensioner.