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Actuarial certificate services for Self Managed Superannuation Funds

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Request an actuarial certificate

There are two ways to request an actuarial certificate:

After completing either the spreadsheet or form, return it to us with a copy of the fund's operating statement, balance sheet, and member statements.

An advantage of using the spreadsheet is that it will provide you with preliminary estimates of the exempt proportion and pension limits, which we will then certify in an actuarial certificate.

If you have any questions about the PDF form, the Excel spreadsheet, or any issue related to SMSFs and actuarial certificates please contact us.

For more detail on when an actuarial certificate is required, and common mistakes occuring in SMSFs, please see below.

Costs

295.390 (unsegregated assets), for a certificate covering 1 year:

  • Excel spreadsheet submission - $196, including GST
  • PDF form submission - $230, including GST

Please contact us for the cost of Valuations Reports & Tax Certificates for defined benefit pensions for:

  • Reg 9.31 SIS valuation with segregated 295-385 ITAA
  • Reg 9.31 SIS valuation with unsegregated 295.390 ITAA

When is an actuarial certificate required

A Self Managed Superannuation Fund (SMSF) that pays a pension may be required to obtain an annual actuarial certificate. The reasons for this are:

  • Tax exemption (as per the Income Tax Assessment Act 1936)

    The purpose of a certificate is to determine the portion of the fund's income that is exempt from tax. Only that income derived from pension assets is exempt from tax. The actuarial certificate will provide the percentage of fund income which is tax exempt.
    If the Trustees are wanting to claim exempt current pension income (ECPI) from income tax, an annual 295.390 actuarial certificate is required if either:
    • a. a fund has both pension and non-pension accounts, and the assets backing the pension and non pension accounts are unsegregated, or
    • b. the market value of the assets supporting an income stream benefit exceeds the member account balance supporting the benefit. In such cases, the excess amount won't be considered to be segregated current pension assets
    Note that if the Fund has incurred a tax loss a tax exemption certificate from an actuary is not required.

  • Adequacy (as per the Superannuation Industry Supervision Regulations 1994

    This is an annual requirement of all SMSFs paying defined benefit pensions (lifetime, life expectancy, Term certain, flexi). The actuarial valuation of a fund's net assets determines whether there is a "high degree of probability that the fund will be able to pay the pension as required under the fund's governing rules". Centrelink pensioner receiving a defined benefit pension would also require a certificate each year. For further details concerning the Centrelink requirements, please refer to the website of the Department of Families, Housing, Community Services and Indigenous Affairs.

Common Mistakes Occurring in SMSFs

  • Market valuation of assets

    Auditors, accountants and trustees must make sure the assets at the end of financial year are valued at market rates. This is important in determining the level of pension in the coming year.

  • Payment of pensions

    During the financial year all pensions paid must be paid in "cash";. That is a benefit is cashed when the member accepts the money, banks the cheque which is subsequently honoured or receives a credit by way of electronic transfer from the SMSF. Therefore if a member receives a cheque dated 30/6 and banks it after 30/6, this amount cannot be classed as "cash" for the year ending 30/6 on the cheque. Also a member cannot receive a pension via an in-species transfer from the SMSF to the member.
    The pension account's opening or starting balance may need reduced to comply with the minimum "cash" pension paid under the Regulations.

  • Contributions and pension accounts

    A member's pension account cannot receive contributions during the year. The contributions must be credited to a separate accumulation account. In a SMSF a member may have more than one pension account but cannot have more than one accumulation account. If the assets are not segregated then a 295-390 certificate is required.

  • Contributions from reserve accounts

    Some SMSFs have investment reserve accounts. Amounts paid from these accounts are identified as concessional contributions and any amounts paid over 5% of the members balance are subject to the contribution limits ($25,000 if under 55yoa or $50,000 if 55 and over). Any the amounts coming from the reserves that are subject to the contribution limits must be grossed up by 1/0.85). Members do not need to meet the work test to receive amounts from investment reserves.

  • Investment strategies

    SMSFs are required to have an investment strategy which should be reviewed regularly. It is important especially for SMSFs which are paying pensions that they are mindful that the investments must provide the income or capital to allow them to pay the minimum pensions required under the Regulations. The following are common problems that may occur:
    • In economically turbulent times some investments eg unlisted managed funds, may not be able to be cashed
    • If a SMSF is heavily in property and is relying on capital gain and not rental returns, the assets may have to be sold to meet the minimum pension payments

  • Work test

    A SMSF cannot receive contributions on behalf of a member aged of 65-74 unless the member has met the work test. That is gainfully employed for at least 40 hours in 30 consecutive days during the financial year. Further details on the work test are available at the Australian Tax Office website.

  • Pensions which do not start on July 1

    A pensioner may start a pension part way through the financial year. When a member's accumulation account is to be transferred to a pension account part way through the financial year, the accumulation account should be valued at the day before transfer. This value reflects the maximum amount that may be used to back the pension and is especially important if the value of the assets have dramatically changed since the beginning of the financial year. A member can determine how much he/she wishes to transfer to pension account.

Contact us

If you have any questions concerning actuarial certificates for Self Managed Superannuation Funds please contact us on (03) 9642 2242, and ask to speak with someone concerning actuarial certificates.








Request a certificate