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ATO advice for SMSF members with a market-linked pension

The Australian Tax Office (ATO) has recently been made aware of circumstances where a member of a SMSF commences a new market-linked pension and unintentionally exceeds their transfer balance cap.

An individual may have exceeded their transfer balance cap if they were receiving a life expectancy or market-linked pension just before 1 July 2017 (which was a capped defined benefit income stream) and then commuted the pension on or after 1 July 2017 and the transfer balance debit is nil under the special value rule in Income Tax Assessment Act 1997 subsection 294-1245(1); and then commenced a new market-linked pension.

The ATO has acknowledged these are unintended consequences associated with the current law and will not take compliance action at this stage provided an individual’s circumstances align with the above situation and:

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News

Updates to the unclaimed superannuation money protocol

January 15, 2020

The Superannuation (Unclaimed Money and Lost Members) Act 1999 (SUMLMA), more commonly known as the unclaimed superannuation money protocol, has been updated recently to provide a clearer structure going forward.

SUMLMA provides guidance on in relation to unclaimed money, lost member accounts, superannuation accounts of former temporary residents and their associated reporting and payment obligations. The update has now added content on inactive low balance accounts.

The act now clearly defines what is an inactive low-balance account, how statements and payments work, the registering of lost members and various rules for special cases.

It is important to note that the information in the protocol does not apply to super providers that are trustees of a state or territory public sector super scheme, in which:

The protocol provides administrative guidance only and should not be taken as a replacement for the law or technical reporting specifications.