From 7 December 2024, new regulations made two important changes.
These include:
-
the introduction of a temporary (5 year) amnesty giving SMSF members in receipt of certain old style pensions (market linked / term allocated, complying lifetime and complying life expectancy pensions) the ability to commute these pensions at will rather than only under very limited conditions; and
-
an amendment in the way in which allocations of reserves to fund members are treated for the purposes of the contribution caps. This is a permanent change.
Some people are impacted by both changes. For example, they have a legacy pension which, if fully commuted (thanks to the amnesty), would release reserves and the allocation of those reserves will be subject to new rules.
Others are only impacted by the first – they may wind up a legacy pension under the amnesty but won’t create any reserves by doing so (for example, their legacy pension is a market linked pension).
And finally others are impacted only by the reserve changes – their SMSF has reserves which arose for all sorts of reasons in the past and are now being allocated to members. The consequences of making the allocations will be different in the future.
While these changes do have a very big impact on a lot of people, they are completely irrelevant for most SMSF members.
Helping with everything SMSF – even on niche issues like this one – is Heffron’s specialty. Our leading technicians have 20-30 years' experience with the ever changing super and tax laws, and understand everything there is to know about legacy pensions and reserves.
We can help you or your clients in many ways.
Attend a webinar
Online events
We are running two fully CPD accredited, 90 minute webinars in March 2025. We will cover not just the new rules but also share the ideas and insights we’ve developed based on dealing with hundreds of legacy pensions and clients with reserves.
| 5th March |
Legacy Pensions | Register now |
| 6th March |
Reserves | Register now |
$176 each (incl GST)
$330 both (incl GST)
Private online training
Private webinar for your team
Would you like our webinars delivered specifically for your team? This provides greater opportunity to engage directly with our experts.
We can even work through real examples from your client base (additional charges may apply).
$2,750 per webinar (incl GST)
$5,500 for both webinars (incl GST)
Documentation
Cover all the bases
Have us prepare compliance documentation to record the commutation of legacy pensions, starting new pensions, allocation of reserves and more. We will also include the figures that need to be reported to the ATO.
Pricing varies, discounts for Heffron administration clients
Options paper
Understand the possibilities for a specific case
We can provide a paper that sets out the options for a specific case, together with the pros and cons of each, consequences and relevant calculations.
This can be an invaluable document for those comfortable making the call themselves once they’re confident they have all the facts. In some cases, an options paper just won’t be the right option and we’ll recommend you get a formal Statement of Advice instead.
$4,400 each (incl GST)
Advice
Strategic plan & statement of advice
For more complex cases, or even just cases where you’d like a definitive recommendation from the experts, we can provide a full statement of advice that outlines a plan specific to you or your client.
$8,000–10,000 each (incl GST)
Consultation
Individual discussion with our experts
Tap into our expertise by the hour. We are available for a phone consultation with you, your client (if applicable) or other family members impacted by the change.
$605 per hour (incl GST)
We are always here to help
Stay informed
11 December 2024
Legacy pension amnesty and reserve changes – here at last
I did wonder if I’d ever write those words, more than a few times in the last few years, but it seems we can. So what happens next?
The regulations registered in the last few days are very similar to the ones originally released so our comments about some people being missed remain.
18 September 2024
Movement on legacy pensions
Finally. About. Bloody. Time.
Draft regulations released yesterday provide – finally – the framework for unwinding legacy pensions cleanly and simply for members who choose to do so. It seems amazing that a mere 6 pages (plus one line) of legislation took this long to come about but...at least we have something to consult about now.
18 September 2024
Big changes for funds allocating reserves
The big challenge with reserves under current law is that unless they are allocated in quite small amounts (less than 5% of each member’s balance each year), they are generally checked against the receiving member’s concessional contributions cap and excesses are subject to additional tax.
