Q I AM concerned about the proposed changes to transition to retirement pensions (TTRs). Can you please let me know the current position.
A IN essence a TTR strategy involves somebody who is working, salary sacrificing to the maximum while drawing a pension from their super fund.
The benefits to them are twofold: they can take advantage of the difference between the 15 per cent entry tax charged on concessional super contributions and their marginal rate, and their super fund ceases to pay income tax.
The May budget hit the strategy in a couple of areas. By reducing the concessional contribution to $25,000 from $35,000 they cut the amount that can be salary sacrificed – and from July 2017 the fund will continue to pay tax at 15 per cent on its earnings if a member is drawing a TTR instead of moving to a tax-free fund.
There is no need to panic. I doubt these measures will be passed in full in the new parliament and nothing will change for almost a year in any event.
You are best to get advice to help you decide if a TTR strategy is appropriate for your personal circumstances.
