Arguably the biggest change to the superannuation rules in recent times was the introduction of the Transfer Balance Cap (TBC), which effectively limits the total amount of your retirement savings you can move into a pension account.
This cap was initially set at $1.6 million but is subject to indexation in line with inflation in $100,000 increments.
Indexation first occurred on 1 July 2021, when the cap was increased to $1.7 million. The next indexation took place on 1 July 2023 when, due to the rapid increase in inflation as measured by the consumer price index (CPI), the TBC increased by $200,000 to $1.9 million.
Based on recent CPI data the TBC will again be indexed, this time to $2 million, on 1 July 2025, assuming the government doesn’t intervene and delay the change.
Outcomes and opportunities from indexation
The increase to the general transfer balance results in strategic opportunities for you to consider and, where appropriate, implement in accordance with your super fund rules.
These opportunities include:
