The transfer balance cap limits how much you can transfer into a retirement phase income stream. The cap is currently $1.6 million and it applies to all retirement phase income streams, including:

• Account based pensions.
  
• Transition to retirement pensions that are in retirement phase, and
  
• Defined benefit pensions.

Your transfer balance amount is calculated using a credits and debits system. Super money transferred into a retirement phase account will increase your transfer balance amount. Conversely, any lump-sum withdrawals – known as commutations – you make from a retirement phase account will reduce your transfer balance amount.

Investment earnings you may receive won’t impact your transfer balance amount, even if they take your balance in retirement phase over $1.6 million. Also, pension payments won’t reduce your transfer balance amount.

If you exceed your transfer balance cap, you may have to:

• remove the excess from one or more retirement phase income streams, and or
  
• pay additional tax.