Starting a pension from an SMSF

Font Size:

Barry has decided the time is right to retire but he’s unsure of the process when it comes to advising his SMSF.

Q. Barry

I hope you can help. My wife and I are both 62 years old, have our own self-managed super fund (SMSF) and have been in transition to retirement since July 2012. We are going to retire soon and would like to know what is the process. Do I just write to our SMSF and advise of our retirement? Do I have to fill out any forms for the Government? Do I need to write to anyone else to advise of our retirement? I cannot find any information on the actual process.

A. It is important that any changes in your SMSF are well documented. Given that you have already started a transition-to-retirement pension, most of the necessary paperwork, such as actuarial certificates, should be in place.

Once you have chosen your pension and are certain it meets the minimum pension standards noted below, you should advise your fund’s trustee of your decision.

Minimum pension standards

  • the pension must be account-based, except in limited circumstances
  • you must pay a minimum amount at least annually
  • you cannot increase the capital supporting the pension using contributions or rollover amounts once the pension has started
  • a pension being paid to a member who dies can only be transferred to a dependant beneficiary of that member
  • you cannot use the capital value of the pension or the income from it as security for borrowing
  • before you can start a pension, you must pay a minimum amount in certain circumstances.

Before making any financial decisions, you should consult a financial advisor or accountant. He or she will also be able to advise you of the process and complete any necessary paperwork. There will be a fee for this service.

Once you reach Age Pension age, you should apply for the Age Pension, which is assessed and determined on your income and assets. If you do not qualify for an Age Pension, you may still be eligible for a Commonwealth Seniors Heath Card, which entitles you to many worthwhile concessions.

Join YourLifeChoices today
and get this free eBook!

Join
By joining YourLifeChoices you consent that you have read and agree to our Terms & Conditions and Privacy Policy

Written by Debbie McTaggart

5 Comments

Total Comments: 5
  1. 0
    0

    Debbie,
    When you say “•a pension being paid to a member who dies can only be transferred to a dependant beneficiary of that member.”
    Does that mean a pension can continue to be paid to a dependant beneficiary, rather than the balance of the members account being paid to the dependant beneficiary? I am not quite up to date with the latest rules and was not aware of this? I thought if a member died they would cease being a member? Can you confirm that this is the case?

  2. 0
    0

    Is there a need to discontinue Dividend Reinvestment Plan when moving on to retirement phase?


FACEBOOK COMMENTS



SPONSORED LINKS

continue reading

Health

Mozzies biting? Here's how to choose a repellent - and how to use it

Mozzies biting? Here's how to choose a repellent (and how to use it for the best protection) Shutterstock Cameron Webb,...

Entertainment

Sir Bob Geldof on grief, fame and getting through it all

I've hardly started questioning Sir Bob Geldof before he is off on a long, sweary rant about everything he thinks...

Australia

Abandon Australia Day and choose the history we want to celebrate?

Australia Day is the anniversary of the arrival of the First Fleet in Australia. On 26 January 1788, 11 convict...

Community

Speaking up for the disappearing art of listening

Columnist Peter Leith is 91 and describes himself as "half-deaf and half-blind". But he sees and hears a lot and...

Beauty

Hyperpigmentation: How to tackle those tricky dark patches on your ski

There are plenty of great things about summer - sunshine, picnics and fruity cocktails immediately spring to mind - but...

Australia

Enthralling, dystopian, sublime: NGV Triennial has a huge 'wow' factor

Refik Anadol: Quantum memories 2020 (render) custom software, quantum computing, generative algorithm with artificial intelligence (AI), real time digital animation...

Australia

Where to eat, drink and play on Kangaroo Island

Australia's third largest island is an oasis of pristine wilderness, premium produce and hidden secrets ripe for discovery. Easily accessible...

COVID-19

Will you need a vaccination to visit Australian venues?

State premiers have suggested that once vaccinations begin in Australia, those without vaccinations may be banned from visiting some venues...

LOADING MORE ARTICLE...