Cherry Picking a UNPB to take a Lump Sum or Pension
Given that when a Pension is cashed, the first components to be cashed are UNPB’s.
The proportioning rule only prevents cherry picking to cashing in benefits, however Cherry picking to preserve UNPB amounts before a pension is commenced or lump sum withdrawn is possible.
For example, a strategy of only using half the Accumulation Interest to start a TRIS and not selecting the UNBP component (cherry picking the non UNBP components) to be included in the TRIS will enable the UNBP to be preserved in the Accumulation Interest. [Source ATO NTLG Superannuation Technical Subgroup minutes 16.06.09.]
Accordingly ‘cherry picking’ is allowed to start a TRIS or Pension, but cherry picking is not allowed to withdraw from a TRIS, see the <proportioning rule>.
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