March 18, 2019 11:47 am
One of the best ways to ensure regular, flexible and tax-effective income as a pensioner is through an income stream from your SMSF. As a member, you can receive an income stream in a reoccurring series of benefit payments from your super fund.
Income streams from an SMSF are usually account-based, which means that the amount allocated to the pension comes directly from a member’s account. Once an account-based pension commences, there is an ongoing requirement for the trustees of the superannuation fund to ensure the pension standards and laws are met.
Standards that must be met in order for SMSFs to pay income stream pensions include:
- The minimum amount must be paid at least once a year.
- Once the pension has started, the capital supporting the pension cannot be increased by using contributions or rollover amounts.
- When a member dies, their pension can only be transferred to a dependent beneficiary if they have any.
SMSF trustees may need to amend fund trust deeds to meet the minimum pension standards. For more information on how to do this, you should consult a legal adviser. Records must be kept of pension value at commencement, taxable elements of the pension at commencement, earnings from assets that support the pension and any pension payments made.
Categorised in: super