Amendments to the transfer balance credit provisions for successor fund transfers

12 days left to have your say
Date
-
Consultation Type
Exposure Draft

Key Documents

The government is consulting on legislative amendments to the transfer balance credit provisions for individuals with a capped defined benefit income stream to ensure members are not adversely impacted by a successor fund transfer between superannuation funds.

Current legislation

Under current legislation, a member’s transfer balance may be unintentionally impacted due to the original income stream being treated as ceasing and a new one beginning.

This means a new valuation of the capped defined benefit income stream is required which can result in a higher value for transfer balance purposes and lead to adverse outcomes for some members.

Draft legislation

The draft legislation would amend the transfer balance credit provisions so that the credit and debit arising due to a successor fund transfer for individuals with a capped defined benefit income stream are equal.

This would ensure the amounts cancel each other out and the member’s transfer balance account is not impacted by the successor fund transfer.

Amendment application

The amendments would apply retrospectively to transfer balance credits that arose in relation to successor fund transfers that occurred on or after 1 July 2017.

The amendments do not apply retrospectively in certain circumstances where members could be made worse off. This includes some holders of life expectancy and market‑linked pensions.

The government welcomes feedback from interested parties on the draft legislation and explanatory statement.

Responding

You can submit responses to this consultation up until 24 April 2024. Interested parties are invited to comment on this consultation.

While submissions may be lodged electronically or by post, electronic lodgement is preferred. For accessibility reasons, please submit responses sent via email in a Word or RTF format. An additional PDF version may also be submitted.

All information (including name and address details) contained in submissions will be made available to the public on the Treasury website unless you indicate that you would like all or part of your submission to remain in confidence. Automatically generated confidentiality statements in emails do not suffice for this purpose. Respondents who would like part of their submission to remain in confidence should provide this information marked as such in a separate attachment.

Legal requirements, such as those imposed by the Freedom of Information Act 1982, may affect the confidentiality of your submission.

View our submission guidelines for further information.

How To Respond

Email

superannuation@treasury.gov.au

Post

Address written submissions to:

Retirement, Advice and Investment Division
Treasury
Langton Cres
Parkes ACT 2600

Enquiries

Email: superannuation@treasury.gov.au