Commuting complying DB pensions

A complying defined benefit pension is a non-commutable income stream. Generally, a member cannot commute a non-commutable income stream and pay out the benefits as a lump sum. There are limited instances when a member can commute a complying defined benefit pension and one such occasion is when the proceeds are used to commence another complying income stream.

There are only two types of complying income streams now available to members wishing to commute their complying defined benefit pensions. The two complying income streams are:

  1. Complying market linked pensions (Term allocated pensions (TAP)
  2. Retail complying annuities

We understand that Challenger has closed their Complying Annuity product. We are not aware of any other alternatives in the market.

Helpful documents

Information sheet

This information sheet we discuss the options available to members (and their advisers) who have a complying defined benefit pension in their SMSF and find they are required to change this arrangement.
10 min read

Case study: Commuting a complying lifetime pension

John is receiving a complying lifetime pension and his pension has failed the high probability test this year. John wishes to find out the options available to him and how each option will affect their retirement lifestyle
20 min read

Case study: Commuting a complying life-expectancy pension

Karen is receiving a 15 year complying life-expectancy pension that will cease on 31 December 2017. Karen wishes to find out the options available to her and how each option will affect their retirement lifestyle.
20 min read

Market linked pensions

This section provides more information on market linked pensions for those clients who wish to commute their complying pension into a market linked pension.

Understanding market linked pensions (MLP)

20 min read

Fact sheet: Complying market linked pensions

10 min read