As previously noted, the Government has released regulations to permit the conversion of legacy pensions and reserves over a 5 year period and to better allow allocations from non-pension reserves. These regulations have now been made by the Governor General.

The regulations will allow the commutation of pre-2007 pensions to be converted into account based pensions, or back into accumulation and/or to be paid out as lump sums. The measure will cover market linked pensions, life expectancy pensions and lifetime pensions, as well as reserves that support such pensions. This will be a welcome relief for members “stuck” in such pensions.

In addition, for non-pension reserves, allocations will now be subject to the non-concessional contributions cap (rather than the concessional cap) better allowing such reserves to be wound down. Further, pension reserves will be able to be allocated to a beneficiary when the pension member dies.

Phil Broderick
Principal
T +61 3 9611 0163 l M +61 419 512 801
E pbroderick@sladen.com.au