Commencing a pension account for your client

We’ll open a pension account for your client when we receive a completed and authorised application form. Once an account is opened, rollovers from other super funds and switches from existing Macquarie accounts can happen.

It’s important to note that your client’s pension won’t commence until all rollovers, switches and contributions noted in the application have been received into the pension account. This may take several days. We may contact you if the amounts we receive vary from the amounts noted on the application. 

For more information about reversionary pensions, please refer to Switching from super to pension account.

There are several things to be aware of, which are outlined below.

Your client’s pension will commence on the date we received the final amount into the account. If the final amount received varies from the amount noted on the application form, we may contact you to confirm all funds are received.

You can check the pension commencement date of your client’s pension account using the Pension Details Report online. 

Prior to the pension commencing, the “Pension commencement date” will be blank. 

The commencement value will determine the value that is reported to the ATO for transfer balance cap (TBC) purposes. If there is any change in asset values during the time an asset is transferred into the pension account (or purchased in the pension account) these will all impact your client’s TBC. If income is received or expenses are incurred in the pension, they will also impact the TBC.

Practically, this means that the TBC values reported when rolling out of a previous fund and the values transferred into a pension account may not be the TBC commencement value. 

An important consideration is the tax status of the account before the pension commences. In line with ATO guidance, until the pension commences, any income or capital gains made will be taxed as if the account is in accumulation phase. This means that income and capital gains will be taxed at 15% (with 1/3 discount for capital gains where applicable).

If significant changes to the investment portfolio for a pension account are being made that will crystallise capital gains, these gains will only be tax exempt if the sales are made after the pension commencement date. The pension commencement date is populated in the ‘Pension Details’ report.