Actuary clarifies ECPI certificate requirement

SMSFs will not need more than one actuarial certificate to claim exempt current pension income (ECPI) when they switch between using the segregated and unsegregated asset method at different times during a financial year, actuarial certificate provider Accurium has said.

Accurium general manager Doug McBirnie told selfmanagedsuper a fund will not need more than one actuarial certificate to claim ECPI under the proportional method for an income year.

“The Actuaries Institute’s professional standard for actuarial certificates is quite clear that you should only have one certificate per fund per income year,” McBirnie said.

In its September 2017 edition of the “SMSF News Alert”, the ATO said SMSFs using the unsegregated assets method will need an actuarial certificate for each year they claim ECPI, regardless of the type of super income stream benefit being paid. It also said members claiming the tax exemption using the segregated method will not need to obtain an actuarial certificate to claim ECPI.

“Perhaps the misunderstanding or the confusion arises because under the ATO’s new interpretation for how we have to calculate the ECPI you can potentially end up with a fund having multiple periods during the year where part of the year may be segregated and parts of the year they may be required to use the proportionate method,” McBirnie said.

“That might mean you have multiple periods where you need to use the proportionate method and first thing you might think is for each period perhaps you might need a separate actuarial certificate. But that’s not actually the case.”

He added this is the most significant change to how ECPI is calculated for at least a decade.

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