What happens to current pensions?

In relation to a current pension (ie a pension which commenced before 1 July 2017 and remains on foot after 30 June 2017), the paying fund will have to notify the ATO of the pension account balance at 30 June 2017 and the ATO will open a transfer balance account for the taxpayer and credit the 30 June 2017 balance to the transfer account.

The ATO will then determine the extent, if any, the pension is excessive and, if so, notify the fund paying the pension.  The excessive portion must be commuted and transferred to either accumulation phase or paid as a superannuation lump sum.  Excess transfer balance tax will then be imposed to claw back the earnings tax exemption which has applied since 1 July 2017 on the excessive portion.