“What we’re tending to see and what we have historically seen, are pension documents [that have] generally been produced when members start the pension [and that] are wholly inadequate for dealing with the complexities that arise in pensions,” Mr Jackson told SMSF Adviser.

“There are two main issues that we’re seeing with pension documents. One is where people have commenced a TRIS and there is no automatic removal of the TTR restrictions when they satisfy a full, unrestricted conditional condition of release.”

The other main issue with pensions lies with the nomination of reversions.

“What we have seen with a lot of documents is that the pension document and also the trust deed have not been properly drafted for the reversions to work,” Mr Jackson said.

“Or even if they do work, they don’t necessarily work automatically which is obviously necessary under the new rules if you want to have that credit count towards the reversion’s transfer balance cap 12 months after the member’s death.”

Mr Jackson said it is, therefore, vital that reversionary beneficiary death benefit clauses work properly in trust deeds in order to allow the client to get a 12-month concession on the transfer balance cap.

“What we are seeing are a lot of deeds out there where advisers are intending pensions to be reversionary but trust deeds don’t have any clauses to support or allow the trustee to pay to a reversionary beneficiary,” he said.

“That clause needs to make sure that payment to the reversion is automatic, that it happens and there is no conflict in the deed, and there is no conflict with any other provision in the deed and that there’s no exercise of any sort of discretion or administrative power that needs to happen on behalf of the trust deed for that to take place.”