SMSF members can now exit their legacy pensions after the Government finally signed off on updated regulations, some three years after they were initially proposed.
The new regulations, which came into effect from 7th December 2024, allow super fund members to “exit” their legacy super pensions and use these proceeds to acquire other, less restrictive types of retirement pensions.
The changes apply to the roughly 17,000 lifetime pensions, life expectancy pensions and market-linked income streams that were commenced before 20 September 2007 and those that resulted from the conversion of an existing legacy pension established before that date.
A further outcome from these recent changes now allows a more flexible approach when dealing with amounts that are held in “fund reserves,” something extremely common where SMSFs are paying legacy pensions.
