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What is a Lump Sum Pension in relation to a Self Managed Superannuation Fund (SMSF)?

Section 307 - 75 of Income Tax Assessment Act 1997 (ITAA 1997) states that a superannuation lump sum is a superannuation benefit that is not a superannuation income stream.

Draft Taxation Ruling TR 2011/D3 states that a lump sum payment occurs when a member or dependent beneficiary requests that their future benefit / entitlements to an income stream be commuted either entirely or partially to a lump sum (i.e., instead of withdrawing their balance in the SMSF over a period of time they elect to withdraw some or all of the balance at once).

Please note that by electing to receive the entire pension as a lump sum you will effectively end the pension as the balance will have been reduced to NIL.