Transition to retirement income streams (TRIS) assist members to gradually move to retirement by accessing a limited amount of their superannuation.
Previously, funds were eligible for tax-free earnings on the super assets that supported a TRIS. Assets supporting a TRIS now earn taxable income at 15%, regardless of when it commenced.
You can no longer claim exempt current pension income (ECPI) from assets supporting a TRIS where the member is not in the retirement phase.
A TRIS is not in the retirement phase until the member either:
- reaches 65 years old
- notifies their fund that they have satisfied one of the following 'nil' cashing restriction conditions of release, such as
- retirement
- permanent incapacity
- terminal illness.
A TRIS enters the retirement phase when it starts paying a reversionary beneficiary after the member dies. This is regardless of whether the beneficiary has turned 65 years old or has satisfied a nil cashing restriction condition of release.
You must include income from assets supporting a TRIS that isn't in the retirement phase in assessable income. Once the member has met a 'nil' cashing restriction condition of release, the TRIS moves into the retirement phase. The fund can start claiming ECPI on the earnings from assets supporting the TRIS. The TRIS account balance at this date counts toward the member's transfer balance cap.
For more information, see:
- Law Companion Ruling LCR 2016/10 Superannuation reform: capped defined benefit income streams – non commutable, lifetime pensions and lifetime annuities
- Guidance Note GN 2019/1 Changes to transition-to-retirement income streams.