The method decided upon to calculate how an SMSF calculates its exempt current pension income has to be recorded officially.

Even though an SMSF may be eligible to claim exempt current pension income, the fund’s trustees may choose not to take this course of action.

SMSF actuaries are unlikely to recommend a preferred method for calculating exempt current pension income so practitioners should use a rule of thumb to make that call.

SMSFs are not locked in to using the same exempt current pension income (ECPI) calculation method each year and can freely switch as it suits them.

New methods of calculating ECPI should not be used if they override planning opportunities via the use of the existing methods.

The Treasury bill dealing with how exempt current pension income is to be calculated omitted an important element that had been included in the draft version of the legislation.

Two accounting bodies have put forward their own alterations for the calculation of ECPI and called for indexing to apply to disregarded small fund assets.