Changes to the law allowing individuals to exit legacy retirement products and the treatment of allocations from reserves for contribution cap purposes came into effect on 7 December 2024.
The changes:
- enable individuals to exit a specified range of legacy retirement products for up to 5 years
- allow for more flexible pathways to make allocations from a reserve, by:
- providing that where a reserve supported an income stream that is ceased, and the reserve is allocated to the former recipient of that income stream, it will be exempt from both contribution caps
- counting other reserve allocations towards an individual’s non-concessional contributions instead of their concessional contributions.
The changes apply to legacy lifetime, life expectancy and market-linked superannuation income stream products that generally commenced prior to 20 September 2007, or were commenced as a result of a conversion of an earlier legacy product that commenced prior to that date.
More information on the changes can be found by visiting Treasury Laws Amendment (Legacy Retirement Product Commutations and Reserves) Regulations 2024External Link.