Is it possible for an SMSF without a corporate trustee to make both lump sum and pension payments?

An SMSF with individual trustees must have the primary purpose of paying pensions. Some practitioners argue that this in effect means that an SMSF with individual trustees cannot simply pay a lump sum benefit, and that extra paperwork is needed to evidence the pension entitlement first being requested and then being commuted.

While we do not necessarily agree with this view, it is better to err on the side of caution and have the extra paperwork in relation to the pension entitlement first being requested and then being commuted (or alternatively arrange for the SMSF to have a corporate trustee rather than individual trustees).