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If the SMSF has Retirement Phase Accounts only throughout the entire Financial Year, it's considered that all the SMSF's assets are held solely to support Retirement Phase Pensions. This is called being “100% in Retirement Phase”.

 
 
What is “100% in Retirement Phase” at all times?

The followings are some examples of situations when the SMSF is 100% in Retirement Phase at all times of the Financial Year:

1. SMSF with only Retirement Phase Pensions

Your SMSF is entirely in the Retirement Phase from 1 July (i.e. all balances for all members are in SABP/R-TRIS) and there is no balance in the Non-Retirement Phase Account during the Financial Year.

2. SMSF which converts entirely to Retirement Phase on 1 July

Your SMSF has a balance in the Non-Retirement Phase Account at 1 July but the balance is converted to Retirement Phase on 1 July (i.e. if all members commence SABPs with their entire balances or the TRIS enters the Retirement Phase by satisfying a condition of release) so that the entire SMSF is in Retirement Phase after this date, with no further balance in the Non-Retirement Phase Account for the remainder of the Financial Year.

3. Contributions and Rollovers immediately converted to an SABP

Your SMSF is entirely in the Retirement Phase from 1 July and any additional contribution or rollover made during the Financial Year is immediately converted to an additional SABP on the date of the contribution or rollover (subject to the Transfer Balance Cap). For more information on the process of commencing an additional SABP, please click here.

 
 
From 1 July 2017 to 30 June 2021

Between 1 July 2017 and 30 June 2021, when the DSFA rule applies (even if the SMSF is 100% in Retirement Phase at all times of the Financial Year), the SMSF is required to use the Proportionate Method to calculate the ECPI for the entire Financial Year and obtain an Actuarial Certificate.

When the DSFA rule does not apply, the SMSF is required to use the Segregated Method to calculate the ECPI for the entire Financial Year and is not required to obtain an Actuarial Certificate.

 
 
After 1 July 2021

From 1 July 2021, if the SMSF is 100% in Retirement Phase at all times of the reporting Financial Year, the SMSF is required to use the Segregated Method to calculate the ECPI for the entire Financial Year and is not required to obtain an Actuarial Certificate.

Regardless of whether an Actuarial Certificate is required, the SMSF’s Total income for the entire Financial Year is 100% tax exempt when the SMSF is 100% in Retirement Phase at all times of the reporting Financial Year.  

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General Advice Warning

No Advice Express or Implied: The contents of this website are of a general nature only and have not been prepared to take into account any particular investor's objectives, financial situation or particular needs. ESUPERFUND does not provide financial product advice or recommend any financial products either expressly or implied. ESUPERFUND expressly states that it does not recommend, represent as suitable, or endorse any financial product or service available through ESUPERFUND. This applies equally to those financial products which are established for your SMSF when you become a client of ESUPERFUND. Any information provided in relation to any financial product or service available through ESUPERFUND is factual information only about the operation of the account and how data is made available to ESUPERFUND. Where this website refers to a particular financial product then you should obtain a Product Disclosure Statement (PDS) relating to that product and consider the PDS before making any decision about whether to acquire the product. We also recommend that you should seek professional advice (see below) from a financial adviser before making any decision to purchase any financial product referred to on this website. While the sources for the material are considered reliable, responsibility is not accepted for any inaccuracies, errors or omissions.

Seek Professional Advice from a Financial Adviser: ESUPERFUND is a no advice model and does not provide financial, legal or tax advice to clients. We recommend that you seek appropriate professional advice in view of your personal circumstances. A licensed financial adviser will consider your personal situation and make a recommendation suitable to your financial needs. All information detailed on our website is purely factual and is general in nature. Accordingly, you should not rely on it. It should always be remembered that Trustees are legally responsible for all the decisions made even if you obtain advice from a Financial Planner. Whilst a Financial Professional can provide advice and assistance you are ultimately responsible for the Fund.

Fees: Fees relating to operating your SMSF with ESUPERFUND are detailed on our fee page here. When setting up a SMSF it is important to understand that additional fees may apply that must be carefully considered prior to making a decision to setup a SMSF including an ATO Supervisory Levy, Company Trustee Setup Fee (where applicable), and Investment Fees.