Apart for the actuarial certification required for tax purposes, regulation 9.29A of the SIS
regulations[1], effective from January 1999,
requires all superannuation funds providing at least one defined benefit pension
to undertake a yearly actuarial investigation of the adequacy of pension funding.
What does this certification involve?
It is not necessary that the
actuarial certification of adequacy be positive -- all that is needed is for
this certification to be provided. The only consequence of a negative
certification is the loss of certain concessions for social security.
The adequacy standards for this
certification are much tighter than for tax purposes. This means the amount of
assets which is needed to ensure adequacy will generally exceed the amount
that can be certified as exempt for tax purposes.
Whilst APRA has
discretion to approve 3 yearly certification of adequacy, such discretion will
not be exercised unless the value of pensions is only a small proportion of
total fund assets.
How do I get this SIS certification?
You can
automatically obtain actuarial certification of adequacy at the same time as for
actuarial certification of the pension exemption. All you need to do is to
indicate that you require the adequacy certification, when you provide the
information required for lifetime and life expectancy pensions.
