The transfer balance cap limits the amount that can be in the retirement phase on 1 July 2017. This will be the annual income for the 2017/2018 year multiplied by the term remaining from 1 July 2017. As market linked pensions can be paid plus or minus 10% of the calculated amount, it is possible to make an irrevocable election to pay, say, the 90% amount and receive a reduced credit to the transfer balance account as a result.

The total super balance cap determines, amongst other things, the ability to make non concessional contributions in the following year. For market linked pensions the amount is calculated differently to the calculation for the transfer balance cap above. It is simply the account balance at 30 June.