One of the most powerful technical advantages of a reversionary pension is the 12-month delay before the pension is credited to the beneficiary’s Transfer Balance Account.
Reversionary Pension:
- Credit based on balance at death
- Counts toward TBC after 12 months
Binding Death Nomination + New Pension:
- New pension balance counts immediately at commencement
Why This Matters:
This delay may allow beneficiaries to:
- Restructure pensions
- Partially commute existing retirement balances
- Avoid excess transfer balance issues
- Keep more money in retirement phase temporarily
Additional Advantage:
If investment earnings continue after death, a reversionary pension’s TBC credit may be based on the lower date-of-death balance, potentially preserving more cap space.
Reviewing Your Reversionary Pension Strategy?
The timing differences between a reversionary pension and a new death benefit pension may significantly affect Transfer Balance Cap outcomes and retirement-phase flexibility for beneficiaries.
Small structuring decisions today may help reduce future excess transfer balance issues and preserve more retirement savings in the tax-free pension environment.
Visit our Contact Us page to discuss your estate planning and superannuation options.
Disclaimer and Warning
The information above is of a general nature only. It should not be used as a source to make financial decisions. It’s also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status. We recommend that if you are looking for advice on this matter, you should contact us.