Transition to retirement pensions are a special type of account-based pension designed to assist retirees in transitioning from full time work to retirement. These pensions can be commenced when an individual decreases their working hours (say from full time to part time work) to allow the reduced salary to be supplemented by payments from superannuation. Transition to retirement pensions also present an opportunity to implement contribution strategies to maximise the tax free component of the superannuation interest.
Update July 2018: Please note that the tax-free earnings status on assets supporting a Transition to Retirement income streams (TRIS) changed at 1 July 2017. Only where the TRIS pensioner has reported an applicable condition of release to the SMSF Trustee, or attained age 65, will the earnings on a TRIS be exempt from income tax. For more information on this please refer to our article Revisiting TTR strategies for clients