Lump sum payments have spiked in the March quarter of 2018, up 19 per cent from an average of 10 per cent in previous quarters, the latest findings from the SuperConcepts SMSF Investment Patterns Survey have revealed.
The survey revealed pension payments rose 81 per cent in the first quarter, compared to an average of 90 per cent in preceding quarters.
Contribution levels declined during the March 2018 quarter, with average amounts falling from $3,611 in the December quarter to $3,498 in March 2018, SuperConcepts said.
SuperConcepts executive manager, technical & strategic solutions, Phil La Greca said the large increase in lump sum payments was likely a response to the 2017 super reforms.
“Trustees are looking to manage the new $1.6 million pension transfer balance cap requirements by implementing lump sum benefit payments. This is because lump sum payments taken from pension accounts will be recorded as debits on the members’ transfer balance account,” he said.
La Greca said the next quarter could see an increase in the level of concessional contributions as this would be the first year that allows anyone under the age of 65 to be able to claim a tax deduction on personal contributions.
“We also expect that the trend towards higher lump sum payments will continue as individuals drawing more than the statutory minimum pension amount will have reached this level and all additional payments will be treated as lump sums.”