Indexing the Personal Transfer Balance Cap

The General Transfer Balance Cap (GTBC) was introduced from 1 July 2017 and is a cap on the how much can be transferred to a retirement phase pension for a member. The cap ultimately restricts the entitlement a fund has to receive a tax exemption on retirement phase earnings. On face value the GTBC concept is relatively straight forward.

Each individual will have their own personal transfer balance cap (PTBC) which will initially align with the GTBC in the year they commence a retirement phase pension. Based on how much an individual commences a pension for will determine how their PTBC is indexed.

With an initial GTBC of $1.6 million, individuals who commenced a retirement phase pension prior to the first indexation date will have had an initial PTBC of $1.6 million. With indexation occurring on 1 July 2021 to $1.7 million and again on 1 July 2023 to $1.9 million, this fact sheet will explain how the personal transfer balance cap is indexed.

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