Converting a reversionary pension to non-reversionary

David Edward John Moroney

• 15 April 2024 08:22

With the upcoming introduction of the $3m super cap and paying 30% tax, I am thinking of changing our reversionary pensions in our SMSF to non-reversionary pensions.  My trust deed allows this but I'm unsure how to do this in SF360.

Do I have to revert the pensions to a new accumulation account and then set up a new pension specifying it as non-reversionary?  If so, presumably this also requires DR and CR Transfer Balance Account notifications to the ATO on the same day each conversion takes place?

Any help appreciated, thanks.

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• Official comment

  

  Christopher Banks

  • 18 April 2024 06:21

  Hi David,
  
  Yes, commuting back to accumulation and then commencing the new pension is the current method in Simple Fund 360. 
  As for the Transfer balance, BGL recommends reporting all balance changes to the ATO as you said, but you may want to confirm with your auditor.
  I hope the above answers your question and if there are any further questions please reply to let me know so I may assist further
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  David Edward John Moroney

  • 19 April 2024 02:27

  Thanks Christopher

  Based on past experiences in creating new pension accounts SF360 assigns a new member code to each new pension and this is referenced in the ATO's Transfer Balance Account for the fund.  I will have to do the TBA lodgement otherwise the member code the ATO has won't match my SMSF Annual Return.

  I plan to do the redesignation to a non-reversionary BDBN pension on 1 July 2024 to give me time to finalise the accounts at year end and lodge the TBA movements by 28 October, or earlier if possible.

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