Transfer Balance Cap - payment of an ATO Commutation Authority where you have not provided instructions to us.
If you hold more than the transfer balance cap1 in one or more retirement phase income stream account(s), you may receive a notice from the ATO requiring you to move the excess (including a notional earnings amount) within 60 days of the date of issue of the notice.
If you do not act on the notice, the ATO will issue a Commutation Authority to the Fund requiring us to transfer the amount (including earnings) out of your retirement pension and will provide us with a date that we must comply with (even if you do not provide instructions on your preference).
How will we process a Commutation Authority if we do not receive instructions from you?
If we receive a Commutation Authority from the ATO, we will make reasonable efforts to obtain your instructions by writing to you, however, if we don’t hear back from you by the required date, we will comply with the ATO Commutation Authority and transfer the required amount out of your pension. We will formally notify you of the transfer details and also report it to the ATO. The payment will depend on the following:
- if your income stream is a death benefit income stream it will be processed as a withdrawal from the superannuation system and we will pay it to your bank account
- if your income stream is not a death benefit income stream and the commutation amount is less than $1500 it will be processed as a withdrawal from the superannuation system and we will be pay it to your bank account;
- in all other cases we will open a new FirstChoice Wholesale Personal Super account on your behalf and transfer the amount to this account and it will remain in the superannuation system. We will invest the amount in accordance with your investment direction provided to us on your pension account. We will also transfer your non-lapsing beneficiaries as nominated on your pension account to your new FirstChoice Wholesale Personal Super account. If you wish to make additional contributions into this account, you will need to let us know of your investment choice
Note: we are unable to transfer a reversionary beneficiary nomination from your pension to new super account. You can nominate a non-lapsing beneficiary by completing the beneficiary nomination form on colonialfirststate.com.au
The Commutation Authority amount will be withdrawn in line with your investment allocation. If you hold funds in a FirstRate Wholesale Investment Deposit or FirstRate Wholesale Term Deposit, we will exclude this from the transaction.
1. The transfer balance cap is $1.6 million in 2017–18 and indexed to CPI in $100,000 increments. Modified transfer balance cap rules apply for children receiving death benefit income streams.
Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of super, pension and investment products. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. A PDS for Colonial First State’s products are available at colonialfirststate.com.au or by calling us on 13 13 36.