However, several key voices in the actuarial certificate industry have consulted among themselves and with Treasury, and now believe that despite the ambiguous wording, the above is not the intention of the legislation.

“Our understanding is that this is intended to apply to SMSFs in full pension phase only. The intention of the proposed regulation is to rectify an anomaly that has arisen as a result of the new legislation and not to remove the need for actuarial certificates,” Accurium senior actuary Doug McBirnie told SMSF Adviser.

“It seems unlikely that Treasury is intending to reduce oversight of the SMSF sector just when they are bringing about major changes in the superannuation rules.”

Andy O’Meagher, director at Act2 Solutions also acknowledged the wording of a sentence in the memorandum initially created an alarmed response,

“This means that superannuation funds who use the proportionate method but whose only superannuation income stream benefit liabilities arise from account-based superannuation income stream products will also not be required to obtain an actuary’s certificate for the purpose of determining their exempt current pension income,” the memorandum reads.

However, Mr O’Meagher believes that, read in context, including with considerations given to the policy intent of the legislation, it seems unlikely that actuarial certificates for SMSFs with account-based pensions would be completely wiped.

“ECPI is a significant component of the tax benefits provided through SMSFs. It seems self-evident that it is in the best interests of the ATO, and more significantly the trustees, to have experienced professionals involved in the process of determining the appropriate ECPI for those funds where the taxable earnings aren’t clearly defined as separate from the tax-free earnings,” Mr O’Meagher told SMSF Adviser.

PwC’s director of private clients, Liz Westover, also stressed the importance of analysing the sentence in context.

“If you took that paragraph under a different heading, you might arrive at a different conclusion. But my read on it was that it was really trying to deal with that very specific set of circumstances, where you had a fund that was fully in pension phase,” she told SMSF Adviser.

“Given that ECPI is the biggest deduction that’s claimed by SMSFs, I would be genuinely surprised if Treasury were moving away from the need to get an actuarial certificate to ascertain what that figure is.

“I would think it would be inconsistent with government policy to put any ambiguity around calculating ECPI, hence the need for an actuarial certificate.”