Hi John. This is my understanding of how it works.
The $1.6M Pension cap is a once only lifetime transfer limit - you can transfer as many times as needed from accumulation, but never exceed the cap. The cap is derived from the amount(s) at the time of transfer (reported on the ATO TBAR form) and not the ongoing balance of the pension account.
Once in pension mode, the account can exceed the $1.6M and does NOT need to be transferred back into an accumulation account. The 4% min (dependent on age) is based on the prev financial year balance, so if your pension account is now $1,632,000, your 4% min will be slightly more than the prev year.
This not financial advice, just my understanding based on research and discussion with my accountant. Well done on reaching that elusive target.
