Mandatory Document Tool Released

Mandatory Document Tool Released

To avoid a breach of the transfer balance cap it is necessary for members to limit their retirement phase balance to $1.6M by the 30th June 2017. The ATO acknowledge that 30 June member balances will not be known until sometime after that date so, in deference to the rule of bureaucracy, PCG 2017/5 has been released.

It imposes a mandatory requirement for all retirement phase pensioners with a transfer balance over $1.6m as at 30th June 2017 to complete an irrevocable request, acknowledged by the fund trustees, to commute any retirement phase balance in excess of $1.6m to accumulation on that day – once they are aware of the necessary balances. The request must be made no later than 30th June 2017. Merely ensuring that the subsequent commutation occurs is not enough to avoid a breach.

Note that

  • transition to retirement pensions do not count towards the cap,
  • all retirement phase pensions in all funds count towards the cap and
  • though this is an irrevocable undertaking it is not relevant if, on completion of the 30th June accounts, it is apparent that no commutation is required.

To assist you in providing the required documentation for your clients we have prepared a free tool. We hope you find it of assistance.