Note
BGL do not provide accounting or taxation advice. The following is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps.
Overview
With reference to the ITAA 1997 - Section 294.130:
Meaning of capped defined benefit income stream
(1) A * superannuation income stream is a capped defined benefit income stream if it is:
(a) covered by an item of the following table; and
(b) if it is covered by any of items 2 to 7 of that table--it is in the retirement phase just before 1 July 2017.
|
Capped defined benefit income streams |
|||
|
Item |
Topic |
Type of Pension in SF 360 |
A superannuation income stream is covered if: |
|
1 |
Lifetime pension |
Complying |
it is a pension for the purposes of the Superannuation Industry (Supervision) Act 1993 (the SIS Act ) that is provided underrules that meet the standards of subregulation 1.06(2) of the Superannuation Industry (Supervision) Regulations 1994 (the SIS Regulations ) |
|
2 |
Lifetime annuity |
Complying |
it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(2) of the SIS Regulations |
|
3 |
Life expectancy pension |
Complying |
it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation 1.06(7) of the SIS Regulations |
|
4 |
Life expectancy annuity |
Complying |
it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(9) of the SIS Regulations |
|
5 |
Market linked pension |
Allocated |
it is a pension for the purposes of the SIS Act that is provided under rules that meet the standards of subregulation 1.06(8) of the SIS Regulations |
|
6 |
Market linked annuity |
Allocated |
it is an annuity for the purposes of the SIS Act that is provided under a contract that meets the standards of subregulation 1.05(10) of the SIS Regulations |
|
7 |
Market linked pension (RSA) |
Allocated |
it is a pension for the purposes of the Retirement Savings Accounts Act 1997 that is provided under terms and conditions that meet the standards of subregulation 1.07(3A) of the Retirement Savings Accounts Regulations 1997 |
Market Linked Special Value Calculation
Special Value of Market Linked Pension to be calculated automatically by Simple Fund 360 if commenced prior to 1 July 2017. If commenced beyond 1 July 2017 Market Linked Pensions are treated in the same manner as Account Based Income Streams (not with a special value).
Example of Special Value calculation:
| Steps | Calculation |
|---|---|
|
|
Jason has a market linked pension just prior to 1 July 2017. The first benefit he is entitled to receive from his pension just after that time is his fortnightly payment of $3,110.40 due on 8 July 2017. The current account balance of the pension is $600,000 and remaining term in Jason's pension just before 1 July 2017 is 8.75 years.
A credit arises in Jason's transfer balance account on 1 July 2017 for $729,833.13. Simple Fund 360 will include the special value of the pension in the member's Transfer Balance Dashboard. |
Complying Pension Special Value Calculation
Example:
| Steps | Calculation |
|
Jane needs to work out the special value of her lifetime complying pension. The special value of her lifetime pension at 1 July 2017 is 16 times her annual entitlement for 2017–18. The first fortnightly payment after 1 July 2017 is $6,000.
A credit will arise in Jane's Transfer Balance Account of $2,502,857.14. Simple Fund 360 will report the market value of the complying pension however if there is a difference in the market value and special value of the pension the transfer balance event will need to be edited manually to present the special value to appear on the TBAR.
How to edit an event's balance? From the Transfer Balance Dashboard select the edit icon for the complying pension.
Adjust the Credit balance to reflect the Special Value. Select the green tick to save the adjustment.
|
