If passed through Parliament, the legislation would remove the requirement for superannuation trustees to obtain an actuarial certificate when calculating exempt current pension income (ECPI), so long as all members of the fund are fully in the retirement phase for all of the income year.
In instances where the fund is fully in the retirement phase for part of the income year but not for the entire income year, the draft legislation would also allow superannuation fund trustees to use their preferred method of calculating ECPI.
The government said the reforms will reduce costs and simplify reporting for affected super funds.
Commenting on the draft legislation, BDO national leader for superannuation Paul Rafton said that “any measure that streamlines administration and reporting for SMSFs and potentially reduces costs for self-funded retirees is always welcome news”.
“At first glance, the measures look like a sensible approach and positive for superannuation funds.”
“As with all draft legislation, the devil is in the detail and we will be unpacking today’s announcement over the next week in order to form a clear position on today’s proposed ECPI measures,” said Mr Rafton.
Consultation for the draft legislation will close on 18 June 2021. In the lead-up to this deadline, the government is encouraging industry stakeholders to provide feedback via the Treasury website.
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