How to transfer a portion of the fund from an Accumulation account to a Pension account for a member during the course of the current year
How to transfer a portion of the fund from an Accumulation account to a Pension account for a member during the course of the current year
The following example demonstrates how an account in Accumulation mode can transfer portion of the funds to Pension mode during the course of the year:
Sam and Jo are members of a superfund and each have $100,000 of preserved balances, of which $20,000 or 20% is Tax Free component.
The program checks to see that the Tax Free component has been crystallised and makes sure the totals are equal.
On 1 July 2011, Sam Sam goes into pension mode, the "Pension" window will show the current breakdown of her balance. The 20% tax free, and the preserved balance made up $20,000 tax free.
Note: There is no tax payable on the income or capital gains derived by a SuperFund for the ?pension? part of the fund. The pension received by a member from a superfund is tax free, however, the underlying break up of tax free and taxable remains the same. The reason this is done is that if the funds have to go into a deceased estate the break down is needed. During the course of the pension, payouts will be tax free.
Sam Sam now needs to decide how much of the $100,000 she wants to receive in her income stream. In this example we will choose $60,000, and she will select to take the $60,000 out of her preserved funds as that is all she has.
The program will the automatically calculate the % tax free and non tax free based on the balances.
Note: SuperFund uses the allocated actuarial percentage to determine the portion of the current year share of income or loss to attribute to the pension phase.
If there is just one member and the fund is totally in pension mode, the actuarial percentage will be set at 100%, with the total share of income or loss being attributed to the pension. If not, an actuary will usually supply the percentage, as this calculation can be difficult, as it has to consider factors such as the date(s) the portion of the fund went into pension mode, the asset(s)or portion(s) thereof that are in pension mode ect.
Sam Sam's Accumulation account is left with $40,000, of which 20% is still tax free
.
And her Pension account has the $60,000 of which 20% is still tax free.
The SuperFund makes a pension payment of $1000. From the Transaction menu, point to Expenses and click Pensions.
Once the pension payment is posted the member?s report for Sam Sam's Pension account will look as follows.
Program and version
SuperFund, all versions