I follow with great interest your super advice and also your two model investment portfolios.

My wife and I have about $4m in our unsegregated SMSF, which has been in pension mode for the last 10 years, of which about two-thirds is mine and one-third is hers. Thus it is likely that I will be about $1m over the $1.6 cap as at 30 June 17. Obviously I can remove this surplus out of super before that date but my financial adviser says that I need to do nothing at all at this stage. He says that after 30 June my portion can be notionally divided into a ‘pension’ component and an ‘accumulation’ component by means of an ‘actuarial certificate’ that will cost around $250, and that this will meet the legal requirements. Is this a valid option since I never see it discussed?

Best wishes.

I have recently read Graeme Colley’s articles where he states that it is possible to have a higher cap than $1.6 million on 1 July if you are the recipient of a defined benefit pension. I am in this category, however, so far I have been unable to find any information on how this will apply.

Can you please give me some direction as to where I can find some more information in relation to this and how it will be calculated.

I am in the fortunate position of having a reasonable sum of money in my SMSF. At this stage my Fund balance is slightly over the 1.6m Pension Cap by $10k.

Currently I hold approx. 1.5m in stocks and 110k in cash. My SMSF is in pension mode and I pay myself a monthly pension from the fund.

Most of my investments are listed on the ASX and my SMSF has been hovering around the 1.6m limit for some time now. If the markets tread a steady path I estimate I will be over the limit by approx. 20K.

My thoughts were if I was to be over the 1.6m limit prior to the cut of period I would take the exccess from the cash account as it would save me the bother from selling a small proportion of stocks to settle the matter.

I believe I have 2 options with this small excess amount;
A) Roll back the excess into an accumulation account within the SMSF where 15% of tax is payable on the earnings.
B) Withdraw the excess to hold in another entity or personally.

I believe rolling back into an accumulation account could be a bit fiddly so my thoughts were to go with option B and place this excess amount (say 20k) into my personal bank account and possibly put it towards some house maintenance or my kids Uni fees.

I’m assuming that under option B the amount I am withdrawing from the SMSF would be classified as a lump sum payment.

My Question is: Do I need to undertake this trimming to the 1.6m limit each year from here on in, or is this the one and only time that this is required to be undertaken?