This means the superannuation provider must cash the superannuation interests to the deceased person’s beneficiaries as soon as practicable.
It is expected that the new rules provide that where a deceased member’s superannuation interest is paid to a dependent beneficiary in the form of a death benefit income stream, a credit will arise in the dependant beneficiary’s transfer balance account (the superannuation pension ceiling after 1st July 2017). The amount and timing of the transfer balance credit will depend on whether the recipient is a reversionary or non-reversionary beneficiary.
To reduce an excess transfer balance, you may be able to fully or partially convert a death benefit or super income stream into a super lump sum. Or the dependent (assuming already in the SMSF) may be able to convert their own existing entitlements.
Guidance is going to be important, as these issues become increasingly complicated, and advisers become more familiar with the problems and the solutions.
The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.