If there is a possibility that members/trustees will not be able to cashflow their contributions or pension payments by 30th June a promissory note might help.

A contribution can be made by supplying the fund trustees with a promissory note, on or before 30th June, provided it is cashed in the first week of July. This could also be useful to back a contribution bank transfer instruction, made before 30th June, but not finalised by then.

Contributions may also be made in specie by supplying the fund with fully completed transfer documents no later than 30 June. Be careful though, as a transfer from an entity, other than the member or spouse, will be a concessional contribution.

Pensions may also be paid by the fund issuing a promissory note to the member by no later than 30 June. To be acceptable, the fund will need to have sufficient cash to cover it on issue and it must be cashed within the first week of July.

In specie payments to members must be avoided for pension purposes as these are lump sum drawdowns so do not count as pension payments.

Alliance Partners may access a sample promissory note from the technical section of our portal.

Best wishes for the New Year!