The new guidelines for calculating exempt current pension income (ECPI) require additional record-keeping, potentially covering several accounting periods and more data, and are more difficult to apply, meaning specialised software is critical to avoid mistakes.
“It is critical that administrators and the trustees of funds with pensions understand the new rules and apply the ECPI percentage correctly,” Class chief executive Kevin Bungard said today.
“It is hard to see how funds being administered manually will meet the new requirements, especially on top of all the other super reform obligations.
“The latest updates to Class Super automate the tracking, calculation and application of ECPI, delivering considerable time savings, and allow trustees to remain compliant with the new guidelines.”
Class has released these key updates to streamline the new ATO guidelines around claiming ECPI for the 2017/18 income year onwards.
For the financial year ended on 30 June 2018 onwards, a fund must use both the segregated method – for the period while it is still in 100 per cent pension phase – and the unsegregated method – for any periods where it is in a mix of both pension and accumulation phase.
The ECPI percentage must only be applied to income and expenses falling within the unsegregated periods, that is, actuarial certificates now only cover the periods where there are unsegregated assets in the fund.
The previous approach was to apply either the segregated or unsegregated method across an entire year.
Bungard said the actuaries who perform the ECPI calculations have worked together to define a new data standard.
In this latest release, Class Super has updated period update algorithms and ECPI calculations, and now supports the new data standard for integrated actuarial certificate providers.
