Now that non-concessional contributions are not subject to the work test right up to 75, the opportunity to influence a member’s tax components has increased considerably. A strategy that has been with us forever is the withdrawal of unrestricted non-preserved monies from predominantly taxable components and their recontribution as non-concessional contributions. The benefit of a saving of 15% tax on residual benefits paid to surviving children, without any detriment to their parents, is clear.

To maximise the effectiveness of this strategy, a member’s remaining fund balance, just prior to the contribution, should be in pension. This will prevent the tax exempt components from being diluted by any residual taxable components.

The same strategy may be applied to any non-concessional or downsizer contribution if a pension can be commenced prior. If a member has reached preservation age, but not yet retired, a transition to retirement pension will do.