Advisers seek TRIS clarity

3 min read

Clarification around transition to retirement income streams (TRIS) strategies have topped adviser queries according to BT Advice Technical’s September quarter round-up.

The top two queries for the September quarter are:

  1. APRA guidance around retirement for people aged 60+ including a potential impact on TRIS
  2. TRIS with a reversionary nomination.

Financial advisers have been seeking clarity around how clients aged 60+ with multiple employment arrangements will be affected. This is the most topical advice query for the September quarter.

BT’s Technical Consultant, Tim Howard says “While nothing has specifically changed in this area from a legislative point of view, the APRA guidance paper certainly reinforces the rules around employment arrangements and conditions of release.”

Following APRA updating Superannuation Prudential Practice Guide SPG 280 in June this year, financial advisers now have additional clarity around when clients aged 60+ with multiple employment arrangements may access their preserved super benefits.

APRA has confirmed that when a member who has two or more gainful employment arrangements has reached age 60, they will meet a retirement condition of release if they were to cease any one of these arrangements.

Mr Howard said “Given the recent changes to the tax treatment of the earning on assets supporting transition to retirement income streams (TRIS), it is now even more important to consider whether a member can start a retirement phase pension, such as an account-based pension, or convert their existing TRIS into an ABP.”

The second most topical query has been around how a TRIS with a reversionary beneficiary can validly pass to the nominated beneficiary after death.

Mr Howard said “Parts of the new super laws and supporting commentary from the ATO point to the reversionary beneficiary themselves needing to satisfy a condition of release at the time of the original member’s death. While this is creating a degree of uncertainty from an estate planning point of view, a number of industry participants are currently seeking further clarification on the issue”.

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Nicole Webb
nicole.webb@btfinancialgroup.com
0466 479 673

Lisa Parrett
lisa.parrett@btfinancialgroup.com
0432 933 796

Noelle Waugh
noelle.waugh@btfinancialgroup.com
0466 017 594