Treasury is seeking industry consultation on a draft regulation that will allow individuals to exit certain legacy retirement products.
The Treasury Laws Amendment (Self-managed superannuation funds—legacy retirement product conversions and reserves) Regulations 2024 (draft regulations) was announced by Minister for Financial Services Stephen Jones on Tuesday.
The draft regulations will:
- enable individuals to exit a specified range of legacy retirement products for up to 5 years; and
- 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; and
- counting other reserve allocations towards an individual’s non-concessional contributions instead of their concessional contributions.
The draft regulations apply to legacy lifetime, life expectancy and market-linked superannuation income stream products that 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.
Submissions are open until 8 October 2024.