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Transition to retirement (TTR) changes

With the Federal Government’s proposed changes to the transition to retirement (TTR) pension to take effect from 1 July 2017, those with existing arrangements should review them to avoid any adverse impact on their retirement funds.

Following changes in the 2016 Federal Budget, from 1 July 2017, transition to retirement (TTR) pensions will no longer receive a tax-free status on the investment earnings of pension accounts. The investment earnings will be taxed at 15 per cent for both new and existing TTR arrangements.

Although the tax benefits of TTR pensions will be removed, some attractions will remain. For those who have been receiving a TTR pension, if they retire or change jobs after age 60 they can access their existing super balance in an unrestricted way, as the pension converts to a full account-based pension.

The annual TTR pension will remain tax-free for those over 60, however, those below this age will be discouraged to start or continue a TTR arrangement as they will be subjected to 15 per cent tax on all investment earnings.

For those over 65, commencing a pension with a balance of up to $1.6 million will generate a tax-free status.

Those approaching retirement should check if their TTR pensions are eligible to be converted into full account-based pensions.

Posted on 8 November '16 by , under Super.

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What to consider when consolidating your super

The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.

Before consolidating your super, it is important to do the following:

Research your funds' policy
Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:

  • Exit fees
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  • Investment options
  • Ongoing service fees
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Check employer contributions
Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.

Gather the relevant information
When consolidating your super, you will need to have the following details ready:

  • Your tax file number.
  • Proof of identity. This could include your driver's license, birth certificate or passport.
  • Your fund's superannuation product identification number (SPIN).
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  • Details of your previous fund.

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