What happens when the pensioner satisfies a ‘full’ condition of release?
Our TRIS kit has been drafted so that once the pensioner satisfies a condition of release with a nil cashing restriction (such as retiring or attaining age 65), then no maximum limit applies, and the TRIS then in effect automatically converts to a normal account-based pension unless otherwise agreed between the pensioner and the trustee.
As there is no maximum annual payment limit imposed for an account-based pension, the pensioner could, on satisfying a ‘full’ condition of release, withdraw the entire pension account balance. However, the minimum limits imposed by law on pensions will continue to apply to the account-based pension. The conversion to an account-based pension will allow income from the assets supporting the account-based pension to obtain a tax exemption (subject to the $1.6 million cap on the commencing balance of pensions from 1 July 2017).