“If it doesn't, obviously that income stream is no longer eligible for exempt current pension income,” Dunn said.

“It ceases for tax purposes on one divided income year, and any payments made are treated as lump sums from accumulation, and you need to commence the pension again to be eligible for ECPI.”

Dunn said this regulation has existed for some time, but the implications are slightly different for transfer balance account reporting if the pension stream has not met the standard.

“For the transfer balance cap purposes, the income stream is taken to cease at the end of the year in which the pension payments were not met, or technically at the time you realise that the pension standards weren't met or the end of the year.”

“However, most often, you're past that income year before you realise you haven't met the pension standards. What we need to do in this circumstance is a transfer balance account report for a debit based on the market value of the income stream at 30 June.”

She said there was no need for any other TBAR adjustments and instead of doing a debit or credit for 1 July where it ceased for tax purposes, it should be done at 30 June as it meant the fund was using the balance at the end of the financial year.

“That means you don't need to undo any other TBAR events that you reported prior to that date.”

“If you did report any TBARs around lump sums or partial commutations up to 30 June, you don't need to cancel those or make any amendments. You simply need to do a TBAR debit for the market value. The concept is you get the debit for failing 30 June, but then say you started it again straight away and you had that portability that you could put that entire amount back into retirement phase without breaching the member's personal transfer balance cap.”