“Advisers will have to liaise with clients in May or June to commence a pension from 1 July, rather than in the following February when the accounts are being done,” said Michael Hallinan, Townsends Business and Corporate Lawyers special counsel for superannuation.

“Given the tax significance of pension commencement - e.g. entitlement to except current pension income ‘deduction’ - the ATO will be particularly interested that if the pension commences by means of a request from the member, the request is dated on or before the commencement date.”

Mr Hallinan added that the ATO has softened its requirement for what constitutes a commutation of a pension from a draft ruling which noted that a pension could only be commuted if the amount was fixed.

“The ATO has moved away from this position but has not specified what documentation should be used to commute a pension given that a commutation is the payment of a present lump sum in lieu of future pension payments,” Mr Hallinan said.

“If a member simply asks for $20,000 from the pension account, is this a commutation or a variation of the drawdown account? Does adding the word ‘commutation’ to the request get it over the line?”