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Consider these statements. (i) Investment earnings on assets supporting a transition-to-retirement income stream are taxed in the fund, unlike those supporting a retirement-phase account-based pension. (ii) There is a limit on the total amount a person can hold in accumulation phase.
Statement (i) is true: a transition-to-retirement income stream is not in retirement phase until a condition such as retirement or turning 65 is met, so earnings remain taxed (up to 15%), whereas retirement-phase earnings are exempt (ATO, Retirement withdrawal, updated 31 Mar 2026: earnings on retirement phase accounts are not taxed). Statement (ii) is false: the ATO states there is no limit on the total amount held in accumulation phase; the transfer balance cap limits retirement-phase transfers.
The transfer balance cap applies to retirement phase, not accumulation.
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