Transfer Balance Account Reporting

21 Aug 2017

Written by

David Busoli, Principal

The ATO has released a discussion paper on the new Transfer Balance Account Reporting regime. Significantly, the paper assumes that the merits, desirability and practical implementation of the new regime are settled. What is now open for discussion are two alternative implementation options concerning which events should be reported 10 days from month end and which should be reported 28 days from the end of a quarter.

The new regime does not commence until 1 July 2018 and will only affect events which concern changes to the transfer balance account but the additional administrative activities and levels of care required by all parties are not insignificant. Essentially the practice of completing pension documentation retrospectively to match fund behaviour with tax consequences will cease. Extra vigilance will be required to ensure that pensions are formalised at the time they commence. This will require close to real time reporting. The ATO has played down the need for real time reporting by pointing out that pensions are not “regularly commenced” however, for existing pensions, there are real advantages for drawings over and above the pension minimums to be recorded as commutations. These must also be regularly reported.

This is not a minor change. It will require a different approach by trustees, advisers and administrators. We will keep you informed as matters progress.

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