Background
As announced in the Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021External Link, Superannuation trustees that hold all fund assets in retirement phase for part, but not all of the income year, can now choose to treat the assets as not being segregated current pension assets for that period. Funds who make this choice will be able to use the proportionate method for calculating exempt current pension income (ECPI).
This change does not affect funds that only pay retirement phase pensions and only have segregated current pension assets at all times in an income year. Such funds will be required to continue to use the segregated method to calculate ECPI. The change also does not affect funds with disregarded small fund assets, who will be required to continue to use the proportionate method to calculate the fund’s ECPI.
You can refer to ATO website for more details.
What has been updated?
You can select the ECPI calculation methods for the eligible funds from 01/07/2021
Navigate to Fund level > Settings > Fund defaults > Fund Policies > New Fund Policies > enter start date > Election of ECPI Calculation Method
The drop-down menu will have two options: Both (Proportionate + Segregated) Method and Proportionate Method:
If you change the election of ECPI calculation method after running a 30 June period update, a reminder will be shown on the Fund Policy page as below:
Once the change is processed on Fund Policy page, a reminder will be displayed on the related Period Update page and it's required to re-process the 30 June period update to reflect on the changes:
When you confirm the election of ECPI calculation method, process the 30 June period update without any warnings and select Request Actuarial Certificate on the Period Update pages, the election of ECPI calculation method will be shown in the Fund Details for your reference:
If you didn't make any election of ECPI calculation method in the Fund Policy for the eligible funds, the system will make the Both (Proportionate + Segregated) Method as default method.