Jul 31, 2026 – 5.00amQ: I retired in 2017 with a $1.2 million super pension which I increased to $1.675 million in 2024 through a combination of downsizer and non-concessional contributions. Recently, when my fund decided to merge with another, I elected to instead transfer my total super balance of $1.72 million to a new super fund. After the transfer, the Australian Taxation Office said I had exceeded my cap by $45,000, with a warning that if it wasn’t commuted, I faced having to pay tax and penalties. My understanding of super is that pensions are tax-free, so transferring a pension balance to a new fund should not require commuting. Is that not the case? – MikeA super pension must be ceased and restarted if you transfer it from one super fund to another. Bethany RaeSubscribe to gift this articleGift 5 articles to anyone you choose each month when you subscribe.Subscribe nowAlready a subscriber? Fetching latest articles
Why moving a tax-free super pension to a new fund can incur a tax bill
When super funds merge, member pensions carry over without penalty, but it’s a different story if you choose to move your pension-phase super to a new super fund.
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