SUPERCentral Governing Rules is Updating for Deferred Superannuation Income Streams

The SUPERCentral Governing Rules will be updating in the near future.  The principal reason for the update is to allow the trustee to issue new retirement income stream products called deferred superannuation income streams.  A trustee of a self managed superannuation fund is able to issue these types of income stream products if the product is entirely supported by a deferred superannuation annuity.

A deferred superannuation income stream is simply an income stream the commencement of which, is deferred for 12 months or more.  This is in contrast to an account-based pension which has no deferral period.  For example, a deferred superannuation income stream could be purchased on 2 January 2019 with a deferral period of 5 or even 10 years.  In this case, the first pension payment would be made in respect of the period commencing on 2 January 2024  (5 year deferral) or 2 January 2029 (10 year deferral).  

A deferred superannuation income stream must be payable for the lifetime of the member.  Consequently, a deferred superannuation income stream is a defined benefit product.  Since  2004 SMSFs can no longer issue new defined benefit products (however products issued before 2004 can continue to be paid).  However, SMSFs can issue new defined benefit products if they are entirely supported by defined benefit products issued by a life insurance company.