He said it had been unclear, however, as to whether the trustee can use the same documents or whether they “have to roll [the pension] back and start afresh”.

This was not even considered by the ATO when it first issued rulings in the area, according to Mr Butler.

“We now have a response from the ATO which does provide certainty,” he said.

“The ATO say you must do all the documents again. You’ve got to do all the re-calculation, the market valuations and document all this from a rollback position because technically, when you failed to pay the minimum, it was a rollback from the start of the financial year.”

Mr Butler said that where regulations such as meeting the minimum payment for the pension were met in the following income year, “a new pension would be taken to have commenced”.

“At a minimum, the trustee would be required to have new documents evidencing the re-valuation at market value and the re-calculation of the minimum amount,” he said.

“Additionally, you’d need to work out the tax-free and taxable on the pension.”

This guidance from the ATO, Mr Butler said, is unlikely to be the news the industry was expecting.

“The ATO is basically saying, 'Yes, you’ve got to go through all that documentation process again if you fail the minimum', so it’s not just failing the minimum and wiping out your pension exemption, it’s also the cost of all those documents again,” he said.