SMSF documentation cannot be drafted on the spot in an effort to allow pension overpayments to be treated as commutations, a technical expert has said.

Trustees who have been paid more than the new minimum pension amount need to check the timing of payments before seeking to use the excess as a commutation.

COVID-19 could help resolve the transfer balance cap problem faced by SMSFs looking to restructure their old legacy pensions, an SMSF technical expert says.

Term and lifetime annuities will not be affected by the change in minimum pension payments.

The current market downturn has highlighted the need for legacy defined benefit pensions to shift to more modern alternatives.

Advisers should keep in mind the existing “pecking order” for taking benefit payments exceeding the minimum pension when applying the government’s new reduced minimum pension measure, an SMSF technical expert says.

The reduction in minimum pension drawdown amounts will have a greater impact in the next financial year, but trustees should be planning for it in the near future.