Rollback Pension to Accumulation

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10 Comments

  1. Sue reinker

    It was interesting reading your article.I. Am commuting my pension account balance to accumulation an accumulation account.
    As a trustee the auditor requires me to raise a minutes to reflect this.
    Do you have a template I can use to do this minute.

    Regards

    Sue

    Reply
  2. Emanuel Giuliano

    What are the rules for rolling a pension account to accumulation, then say 12 months or more later, transferring some or all the the amount transferred back to a pension account

    Reply
    • Chris Strano

      Hi Emanuel, you can generally transfer all or some of a pension back to accumulation phase and then use some or all of that amount to recommence a new pension. Any amount rolled back will provide a credit for Transfer Balance Cap purposes.
      Related Post
      What is a Transfer Balance Cap?

      Reply
  3. Daniel

    What happens to preserved and non-preserved components when you rollback a pension (unrestricted non-preserved) into ana accumulation account that is fully preserved. Do they remain separated or does the entire balance go into preserved.

    Reply
    • Chris Strano

      Great question Daniel. My interpretation is that they retain their preservation status regardless of where they are held

      Reply
  4. Henry

    What asset would be beneficial to roll back into super? Growth or defensive?

    Reply
    • Chris Strano

      I assume you are talking about rolling back from pension to accumulation phase.
      As a very general rule of thumb it would be growth assets to roll back, this is because they usually provide less income and therefore less income tax each year. Also, because growth assets have a higher growth expectation, the asset might be able to be trnasferred back into pension phase at some stage in the future prior to being sold and therefore received tax free.
      Pension phase is also better suited to assets with less volatility to provide more certainty of income and less likely to be sold at a signficiant loss over the short-term to cover pension payments.
      Hope that helps,
      Chris

      Reply
  5. David Foster

    Hello Chris,

    I and my wife are contemplating rolling back our pensions (SMSF) to accumulation phase so that we can may Downsizer Contributions for each of us. I am age 67 and my wife is 65 and neither of us are working.
    Once contributed we would then restart the pensions for both of us.
    Are you aware of any significant downside in this strategy

    Reply
    • Chris Strano

      Hi David,
      There are several to consider with this strategy. Firstly, I’m not sure why you are considering rolling back your existing pensions. Depending on your situation, it may be better not to. Rolling back could have other ramifications. Unfortunately it’s a very broad question. Without knowing your full situation, it’s very difficult to determine the potential risk or considerations.
      Sorry I am unable to be more precise.
      Regards,
      Chris

      Reply

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