Australia: Proposed amendments to superannuation transfer balance cap
Intended to prevent superannuation members from being “adversely impacted” in the event of a merger or successor fund transfer
Proposed amendments
Treasury on 26 October 2023 issued a release announcing that it will propose amendments to the superannuation transfer balance cap for individuals with a capped defined benefit income stream—to apply retroactively to 1 July 2017.
According to Treasury, the amendments are intended to prevent superannuation members from being “adversely impacted” in the event of a merger or successor fund transfer between superannuation funds. Currently, a member’s cap may be unintentionally affected due to the original income stream being treated as ceasing and a new one beginning, which means a new valuation of the capped defined benefit income stream is required that can result in a higher valuation for the transfer balance cap and lead to adverse outcomes.
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