What is the transfer balance cap?
The transfer balance cap is the lifetime limit on how much super you can move into a tax-free retirement pension. From 1 July 2026 the general cap is $2.1 million (ATO). You can still hold more than that in super — it simply stays in the accumulation phase, where earnings are taxed at 15% rather than being tax-free.
Reviewed by Justin Porrins, CFP® · SMSF Specialist Advisor™ · Last reviewed 31 August 2026
Why it exists
The cap limits how much super can sit in the tax-free retirement (pension) phase. It’s typically indexed in $100,000 steps over time (but subject to increases in CPI), which is how the general cap has risen from $1.6 million when it began in 2017–18 to $2.1 million from 2026–27.
What it means in practice
Balances above the cap stay in accumulation, where investment earnings are taxed at 15%. Managing the split between pension and accumulation — and the timing of when you start a pension — becomes a real planning lever as you approach retirement. Your personal cap can differ from the general cap if you started a retirement pension in an earlier year.
Common questions
Can I have more than the transfer balance cap in super?
Yes. The cap only limits how much you can move into the tax-free pension phase. Anything above your cap stays in the accumulation phase, where earnings are taxed at 15% rather than being tax-free. Your tax-free pension could also grow above the transfer balance cap due to strong underlying investment earnings over time relative to your annual pension payments. You are only assessed against your personal transfer balance cap at the time of a pension commencement.
Is the transfer balance cap the same for everyone?
The general cap is $2.1 million from 2026–27, but your personal transfer balance cap depends on when you first started a retirement-phase pension, because of how indexation is applied.
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