On July 1 2017, several changes were made to super, which included new regulations. As with any regulation change, they are often difficult to understand, which can lead to myths and rumours being formed that aren’t correct.
Most of the super regulation changes that came into effect are centered:
Essentially, since July 1 2017, the maximum value that a person can transfer to the retirement phase is 1.6 million.
But let’s take a quick look at all of the rumours these regulations have created so you know what’s truth and what’s fiction.
If you transfer funds into from the retirement phase into the accumulation phase, you cannot withdraw it from superannuation.
Truth: Once you reach your preservation age or the age of 65, benefits can be withdrawn from your super at anytime.
You have to withdraw a minimum amount equal to the percentage of your accumulation account each year.
Truth: This only applies to account based pensions and transition to retirement pensions. The percentage required to withdraw is based on actuarial valuation.
After July 1 2017, only one pension is able to be paid once you reach retirement phase.
Truth: There is no set limit on the number of pensions that can be paid from to an individual.
Your pension balance during your retirement phase has to be reduced to 1.6 million dollars.
Truth: The transfer balance cap is determined by the time in which the account commences. Either the July 1 2017 or June 30 2017. There are different rules to this regulation that applies to the valuation of defined pension benefit pensions.
The total amount that you can have in your superannuation account cannot exceed 1.6 million dollars.
Truth: There is no limit on the amount of funds that a person has in their super. With that said though, if the balance is 1.6 million or above, you are no longer permitted to make non-concessional contributions.
When it comes to the super regulations that changed in July of 17, it can be confusing. While we have gone over a few of the incorrect rumours, it’s still a good idea to contact and consult with a qualified financial professional from Camori Investments, so that you know how the new regulations affect your specific financial situation.