Transition to Retirement Pensions post 30/06/2017 – Simple Fund 360 Knowledge Centre

Remove the tax exempt status of income from assets supporting a Transition to Retirement Income Stream (TRIS);
Individuals will no longer be allowed to treat certain superannuation income stream payments as lump sums for tax purposes;
Full or partial commutations of superannuation income streams will be treated as superannuation lump sums.

Comparison of key features of new law and current law

	New law	Current law
Earnings tax exemption provisions	From 1 July 2017, the government will remove the tax-exempt status of earnings from assets that support a TRIS. Earnings from assets supporting a TRIS will be taxed at 15% regardless of the date the TRIS commenced. This will cover superannuation income streams that are payable at that time and also deferred superannuation income streams where a person to whom a benefit is payable or will be payable has retired, has a terminal medical condition, is permanently incapacitated or has attained age 65. A superannuation income stream is not in the retirement phase if it is a TRIS, or if a superannuation income stream provider has failed to comply with a commutation authority in respect of a member’s transfer balance cap.	Where fund assets are segregated, movements between the pension and accumulation pool have no bearing on the cost base of the asset. For funds that are not segregated, gains on assets used to support accounts in the accumulation phase are included in the assessable income of the fund on realisation under the CGT provisions and tax liability is determined using a proportionate method.
TRIS when a condition of release is met	The legislation does not prescribe that a TRIS automatically converts or ever converts into an ordinary account-based pension (ABP). Rather it just enters into the retirement phase.	It was industry standard that a TRIS would convert into an ordinary ABP automatically upon a nil condition of release being met

Opportunities/Planning in Simple Fund 360

SMSFs which currently have a Transition To Retirement pension can be easily identified using the Analytical Insights screen.
Members' ages can be obtained on-screen or by downloading a list of filtered funds to Excel.

What do I have to do in Simple Fund 360 from 30/06/2017?

I want to continue the TRIS, however, I understand it now is not in Retirement Phase. Do I have to move the TRIS from Pension to Accumulation?

If the Pension will continue in the 2018 FY there is nothing additional you need to do.

For Unsegregated Funds, the Create Entries process will treat the TRIS account the same as an accumulation account.
For Segregated Funds, assets allocated to a TRIS account will be treated as taxable

I will be partially or fully commuting the TRIS as at 30/06/2017 to comply with the Transfer Balance Cap. What do I need to do?

Refer to Commuting pensions before 1 July 2017 to avoid exceeding the $1.6 million transfer balance cap

How do I convert a TRIS to an Account Based Pension?

Refer to How to convert a TRIS to an Account Based Pension

What will happen for TRIS's and application for Actuarial Certificates in 2018?

If the fund only has non-retirement accounts (e.g Accumulation and Pension accounts) there will be no need to apply for an actuarial certificate.

For funds which have a mixture of Retirement and Accumulation accounts the following will occur for Actuarial Certificate application in SF360 for FY2018 onwards

TTR/TRIS pensions will be recorded as accumulation interests
A pension payment from a TRR/TRIS will be shown as an accumulation withdrawal
A conversion from TTR/TRIS to a full ABP or a TRIS (retirement phase) will be shown as a pension commencement
A commutation/rollback of a TTR/TRIS to accumulation will not be submitted

How do I monitor a member's Transfer Balance Cap?

Refer to Transfer Balance Dashboard

Further References