Superannuation (SMSF) document

SMSF Pension Commutation

Need help managing your transfer balance? Use Cleardocs to create all the documents you need to record the commutation of your SMSF pension and either:

  • transfer the pension assets back into the member's accumulation account; or
  • transfer the pension assets out of super as a lump sum cash payment to the member.

This document package can be used if:

  • a member is requesting the commutation; or
  • the trustee received a commutation authority from the ATO and is required to effect a commutation of a pension to bring the transfer balance account in line with the transfer balance cap.
  • Cleardocs fee incl GST $108.90
Product Benefits
  • Assists with superannuation law compliance
  • The fund does not require an underlying Cleardocs deed
  • Pre-population of pension details from earlier Cleardocs orders — saving you typing
  • Extensive online help and local phone support
  • Easy to use question interface
  • Comprehensive and tailored document package
  • Set up a new pension through Cleardocs
Product Information

What documents are included in the Cleardocs package?

The Cleardocs package includes:

  • member's request for pension commutation (if applicable);
  • trustee's notification of pension commutation;
  • minutes or resolutions of the trustee(s) or director(s) of the corporate trustee (as needed by your particular SMSF); and
  • an Establishment Kit explaining what to do next.

What information do you need to record an SMSF Pension Commutation through Cleardocs?

You can download our checklist of the information required to order an SMSF Pension Commutation package.

When does the commutation take effect?

When you create the documents through us, you can choose for the commutation to take effect immediately or you can nominate a specific date.

The fund does not require a Cleardocs deed or a Cleardocs pension

To use the Cleardocs Pension Commutation document package, the SMSF does not require a Cleardocs deed or existing Cleardocs pension documents.

We recommend that you consider updating to the latest version of the Cleardocs deed to ensure the fund's rules permit the member to commute their pension — you can update the SMSF's deed to a Cleardocs deed

Does the member need to be available to sign the documents?

Yes, the Cleardocs document package assumes the member has consented to the commutation and is available to sign the documents.

Seek legal advice

The SMSF Pension Commutation information here should be considered general in nature, and in no way interpreted as legal advice. You must always seek your own independent legal, accounting and financial advice about your particular situation. The summary on this page is for information purposes only.

Frequently Asked Legal Questions

Cleardocs is not a law firm. So as with all the legal material on this site, the answers to these "frequently asked legal questions" are provided by the law firm Maddocks. Cleardocs does not endorse those answers.

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What if I do not have an existing pension payment agreement of any kind?

To use this pack to commute your pension, you will need written evidence that the trustee of the fund is required to pay the pension to the member according to super law requirements.

The ATO in Taxation Ruling TR 2013/5 stated that for a pension to exist there must be written evidence of the trustee being compelled to make recurring pension payments to the member. A deed or agreement is not always required, however, the trustee must ensure there is written evidence of the trustee being required to make recurring pension payments in accordance with super law requirements.

If there is no written evidence then there is no pension which can be commuted.

If the trustee needs to confirm the terms of the pension, then the trustee and member need to document that. If you need to document the terms of a current pension then Cleardocs can put you in contact with a lawyer from Maddocks to provide an estimate of fees.

Does the Cleardocs package include a new Pension Payment Agreement that I can use to start a new pension?

No, not as part of this order. But you can place a separate order for a Pension Payment Agreement.

When the commuted lump sum is rolled-over in my SMSF back into my accumulation account, is that lump sum treated as a contribution?

No, it is not treated as a contribution. However, earnings on the assets moved to the accumulation account from the pension account will be taxed at 15% in the fund from the date of roll-over.

Is the lump sum taxed during the commutation process?

As soon as it goes back into the accumulation account, it loses its tax-free status and earnings on the assets moved to the accumulation account from the pension account will be taxed at 15% in the fund.

If the lump sum is not rolled over into an accumulation account, but is cashed out to the member (outside super), that lump sum may be taxed in the member's hands, depending on the member's circumstances.

Product Reviews

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