Actuarial certificate for segregated methods
Early this year, at a number of presentations, the ATO made the statement that when a self-managed superannuation fund (SMSF) used the segregated method and had commenced an account based pension part way through an income year (that is, not on 1 July), the trustee was required to obtain an actuarial certificate to report exempt current pension income (ECPI) using the segregated method.
Subsequent engagement with representatives from the SMSF actuarial industry confirmed that the ATO view was contrary to the general industry practice and following consultation the ATO has reconsidered its view.
Where an SMSF is paying only a pension prescribed by the superannuation regulations, most commonly an account based pension, including a transition to retirement income stream from segregated assets, an actuarial certificate is not required. This exemption, applies to an SMSF, even where it commences to pay an account based pension during the year. The only exception is where the SMSF is also paying pensions not prescribed by the regulations, where the fund can still have segregated assets but will be required to get an actuarial certificate.
This change will be reflected in a soon to be published addendum to Taxation Determination TD 2014/7 Income tax: in what circumstances is a bank account of a complying superannuation fund a segregated current pension asset under section 295-385 of the Income Tax Assessment Act 1997?External Link
We will also update our website on information for trustees, see also Self-managed super funds and tax exemptions on pension assets
Details of our consultation can be found on our website at ato.gov.au/General/Consultation/What-we-are-consulting-about/Completed-matters-2015---16/#SPA201560
News article: In most cases an actuarial certificate is not required when using the segregated method.