Lifetime Pension Rules

The superannuation fund rules must ensure the following [SIS regulation 1.06(2)]:

1. The pension is payable for the lifetime of the primary beneficiary and, if there is a reversionary beneficiary:

   1. for the reversionary beneficiary's lifetime; or

   2. if the reversionary beneficiary is a child of the primary beneficiary or of a former reversionary beneficiary -at least until his or her 16th birthday; or if he or she is a full-time student at age 16 - at least until the end of his or her full-time studies or until his or her 25th birthday (whichever occurs sooner).

2. The amount of pension payment can be varied only to allow commutation to pay:

   1. a superannuation contributions surcharge; or

   2. an amount to be paid under a Family Law payment split and reasonable fees in respect of the payment split.

3. Unless the Regulator otherwise approves, the sum payable as benefit in each year to the primary beneficiary or to the reversionary beneficiary is no less than that payable in the previous year, except if the change in CPI[1] for the quarter is negative.

4. The pension does not have a residual capital value[2]

5. The pension cannot be commuted except when:

   1. the commutation is made within 6 months after the commencement day of the pension; or

   2. the commutation is made within 10 years after the commencement day of the pension to the benefit of a reversionary beneficiary on the death of the primary beneficiary; or

   3. the eligible termination payment resulting from the commutation is transferred directly to the purchase of another benefit provided as a lifetime or life expectancy pension or annuity; or

   4. to pay a superannuation contributions surcharge; or

   5. to give effect to an entitlement of a non-member spouse under a Family Law payment split.

6. if the pension reverts or is commuted, it does not have a reversionary component greater than 100% of the benefit that was payable before the reversion or the commutation.