The current transfer balance cap is $1.7 million
- It includes the total amount you transfer from your super to any of your pension accounts. It also includes any death benefits you take as a pension.*
- The cap doesn’t include transition to retirement accounts.
- The transfer balance cap doesn’t apply to investment earnings made in the retirement phase. So if your pension account balance grows over $1.7 million, you don’t need to do anything.
- You can leave any amount you have over $1.7 million in your super account.
- If you had a transfer balance cap before 1 July 2021, you’ll have a transfer balance cap calculated for you. This will be between $1.6 million and $1.7 million, depending on your circumstances and this limit is known as ‘your personal transfer balance cap’. To view your personal transfer balance cap and your transfer balance account, contact the ATO.
- The cap is managed by the ATO and will change when it's indexed in the future. Visit the ATO to read more about the cap.
Remember, the cap applies to money in any pension accounts you have with us or elsewhere, so it's up to you to make sure you don't go over.
Over the cap?
If you transfer more than $1.7 million, you’ll generally be liable to pay 15% tax (or up to 30% tax if you’ve gone over before) from the day you go over the transfer balance pension cap.
You’ll have to take the excess money out of your pension account; your options for doing this depend on the type of account you have.
The ATO will send you a notice to take the excess money out by a certain date.
You can either withdraw it or transfer it to a super account.
Withdraw from your pension
If you don’t do anything, the ATO will ask us to remove the money for you. We’ll contact you to let you know your options.
Transfer to a super account
If you don’t have a super account, we’ll open a new Accumulation 1 account for you.
Your indexed pension has a ‘special value’ that’s assessed against your personal transfer balance cap. The special value is calculated using a government-defined formula, usually your annual pension payment multiplied by 16.
If your special value is over $1.7 million and you’re aged 60 or over, 50% of your pension payments above $106,250 a year will be included in your assessable income and you may pay income tax on it.
We’re generally required to withhold some tax from your indexed pension payments to meet pay as you go (PAYG) requirements.
If you have an Indexed pension and a Flexi Pension
You’ll have to ensure that your combined pension balances are under the cap and withdraw or transfer any excess amount from your Flexi Pension.