Transition to retirement income stream rules
Before an SMSF starts paying a transition to retirement income stream (T.R.I.S. or) to a member, the member must have reached their preservation age.
Preservation age – the new rules
Preservation age is the minimum age that a member can access their preserved super benefits without satisfying another condition of release.
Trustees may face penalties if the payment rules are breached.
From 1st July 2015 the legislated rise in the preservation age comes into effect and affects people born after 30 June 1960. A member who turns 55 during the 2015-16 financial year cannot start a transition-to-retirement income stream (TRIS) during that year.
When will my T.R.I.S. start?
The preservation age will continue to rise until it reaches 60. If you were born between:
- 1 July 1960 and 30 June 1961, it’s 56 and a TRIS can start in 2016-17
- 1 July 1961 and 30 June 1962, it’s 57 and a TRIS can start in 2018-19
- 1 July 1962 and 30 June 1963, it’s 58 and a TRIS can start in 2020-21
- 1 July 1963 and 30 June 1964, it’s 59 and a TRIS can start in 2022-23.
- For those who were born after 30 June 1964 the preservation age will be 60 and a TRIS can start from the 2024-25 year and onward.
ATO penalties for breaching the benefits payment rules
The ATO has announced that SMSF trustees may face penalties if they accidentally pay benefits to a member, who is not eligible, resulting in a breach of the benefits payment rules.