There is growing industry concern about the ATO potentially deeming the traditionally straightforward move from a transition-to-retirement income stream (TRIS) to an account-based pension as a new pension interest, a technical expert has revealed.
“Looking across all your clients’ TRISs to determine whether it should be turned to an account-based pension, there’s a little bit of uncertainty at the moment,” NowInfinity SMSF technical director Julie Dolan said during the firm’s first Super Reform Series held today.
“We are waiting for clarity from the ATO.
“Previously, it was under the natural presumption that a TRIS was an account-based pension [from which] lump sum payments can be made.
“And based on the regulation’s definition of what a TRIS is, it is an account based pension with further restrictions.”
However based on these new super reforms, the ATO is potentially considering that it may be a new pension interest, that is, moving from a TRIS to an account-based pension, Dolan explained.
“If that’s the case there may need to be a rollback and a restart, rather than just doing a resolution to move the TRIS to an account-based pension,” she said.
“The risk here, and what the industry is up in arms about to a degree, is that it could lose the grandfathering for any social security for clients who are on TRISs.
“We’re waiting on the ATO [for clarification] and we’ll be keeping you informed on this one but there’s a bit of contention around this at the moment.”
