Superannuation fund members looking to roll over a reversionary pension to a new provider are not restricted from doing so, but cannot use that process to merge or combine existing income streams, a technical specialist has noted.
BT Financial Group technical consultant Matt Manning said the issue was often illustrated by a husband with one pension provider where the stream reverts to the wife, but he wants to roll over to another provider and is concerned about whether that will have any adverse impact.
“If you just want to roll over a pension, and the beneficiary wants a different product, or wants to leave an SMSF, that’s fine. Just do it. You can roll over a reversionary pension or any death benefit pension,” Manning said during an online briefing held yesterday.
“You just can’t combine it with a member pension or send it to accumulation. A normal rollover is completely fine.
“If that question was in the context of grandfathering, then a reversionary pension, just like a member benefit, in the act of rolling it over is going to remove grandfathering. So from that perspective, you would not roll over if it was going to impact them.
“Otherwise, if you’re not talking about social security grandfathering issues, just roll it over to the other fund or provider if that’s what is in the best interest of the client.”
In the same presentation, he highlighted that combining pensions during a rollover was possible if someone commuted the income stream and then recontributed it into an account with an existing pension, but added this would remove any opportunity to retain tax and estate planning benefits.
