6/02/2018. Start me up Commencing a pension the right way. The scope of this session. When and why do members start pensions? Reach preservation age

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Start me up Commencing a pension the right way Neal Dallas, Principal, McInnes Wilson Lawyers Chris Humphrey, Principal, Chris Humphrey Private Wealth Management The scope of this session This

1 Start me up Commencing a pension the right way Neal Dallas, Principal, McInnes Wilson Lawyers Chris Humphrey, Principal, Chris Humphrey Private Wealth Management The scope of this session This session will focus on what is required to commence a pension The Transfer Balance Cap is beyond the scope of this session Peter Hogan will explore pensions and the TBC in Plenary 6 on Day 3 When and why do members start pensions? Reach preservation age Start TRIS Supplement income transition Rebalance spouse accounts (a good reason to consider a TRIS) Re-contribution strategy Maintain tax characteristics (estate planning) Meet a full condition of release 1

2 When and why do members start pensions? Have existing pension but have accumulated further super Additional or stop & start Someone dies (without a reversionary pension) Paying a death benefit Keep money in super asset protection When my adviser recommended it When and why do members cease pensions? Members who are bankrupt When do you get involved? Financial advisers Proactively recommend In response to client request Execution only (Is it really?) At life stages When the rules change 2

3 When do you get involved? Accountants Proactively recommend subject to licensing Reviewing as part of overall (tax) structure When tax and business characteristics change In response to client request When the rules change When do you get involved? Lawyers When documents required On death as part of estate administration As part of an estate planning or asset protection exercise What is required for a pension SIS Regs if the rules ensure Governing rules Rules in trust instrument, other document or legislation Any unwritten rules Prescriptive Trust Deed Member request Separate document minutes/resolution Pension Agreement 3

4 What does the ATO say TR 2013/5 Determine by reference to: T&C agreed by trustee and member Governing rules Relevant SISRs Can t commence before all the capital to support the pension has been added by contribution or rollover A living member pension ceases on death Unless automatic entitlement to income stream What MUST be included vs what CAN be included MUST - minimum requirements set out in SISR CAN Reversions Commutation Variation Case studies 4

Case Study 1 Jay Jay wants to start a pension Current arrangements Condition of release Existing assets Trust deed Existing superannuation interests

5 Case Study 1 Jay Jay wants to start a pension Current arrangements Condition of release Existing assets Trust deed Existing superannuation interests Aspirational What does he want/need to achieve Mechanics When will pension start (2 payments in 1 st year) When will it end What does the trust deed require 5

6 Implementation Advice SOA/ROA/Execution only and PDS Wholesale client? Adjustment to investments/strategy Assets now supporting pension not accumulation Liquidity Documentation Trust Deed Minutes/resolution Pension agreement Terms Reversionary Commutability Variation Other considerations Deed update Estate planning review Asset protection Tax impacts/drivers Professional indemnity Valuation Taxation 6

7 Case Study 2 Jay Jay has an existing pension Jay Jay considers varying his pension Existing pension Where are the pension documents? Does it achieve what Jay Jay needs? Can it be varied? Stop & start? Trust deed Pension terms What are the implications? Implementation what changes? Advice SOA/ROA/Execution only and PDS Adjustment to investments/strategy Assets now supporting pension not accumulation Liquidity Documentation Replacement documents or amendment? 7

8 Other considerations Impact on estate planning Asset protection Tax impacts/drivers Valuation Centrelink and Commonwealth Seniors Health Card grandfathering Taxation Case Study 3 Jay Jay dies No existing pension in place Glory considers starting a pension Current arrangements Existing superannuation interests/transfer balance caps and accounts Existing assets Trust deed Who is in control? BDBN Insurance and untaxed elements on a death benefit rollover post 1 July

9 Aspirational What does she want/need to achieve Mechanics When will pension start? When will it end? What does the trust deed require? Implementation Advice SOA/ROA/Execution only and PDS Adjustment to investments/strategy Assets now supporting pension not accumulation Liquidity Documentation Trust Deed Minutes/resolution Pension agreement Terms Reversionary Commutability Variation 9

10 Other considerations Deed update Estate planning review Asset protection Tax impacts/drivers Professional indemnity Valuation Taxation Case Study 4 Jay Jay dies With pension in place Glory considers what to do Current arrangements What does the existing pension provide Reversionary BDBN Existing superannuation interests/transfer balance caps and accounts Trust deed Who is in control? Insurance? 10

11 Aspirational What does she want/need to achieve? Mechanics Does she need to do anything? Can she vary? Can she stop & start? Other considerations Estate planning review Asset protection Tax impacts/drivers Professional indemnity Valuation Taxation 11

9/02/2018. How Estate Planning has to change. Session overview. SMSFs by asset size 12% Peter Burgess

9/02/2018. How Estate Planning has to change. Session overview. SMSFs by asset size 12% Peter Burgess How Estate Planning has to change Peter Burgess General Manager, Technical Services and Education, SuperConcepts Session overview Rule changes Is TBA control in compression trusted hands? SMSFs by asset