Segregated or Not
Part of the year may be deemed by the ATO to be segregated if it has a period with only pensions. The accounts and the actuarial certificate must reflect this.
Some SMSFs have a total superannuation balance of more than $1.6m and a pensioner may be forced to use the unsegregated ECPI method.
Various actions can be taken - such as allocating excess reserves and rolling over complying pensions to improve the ECPI
percentage. However Centrelink ATE ramifications will need to be considered.
Transfer Balance Caps
Special valuation (and other) rules apply to capped "defined benefit income streams" (DBIS). Flexi pensions don't fall under these rules. Market-linked pensions may or may not be a DBIS depending on the commencement
date. Currently, market linked pensions have commutation anomolies that need to be corrected by legislation.
Where the defined beneift income stream exceeds $100,000, 50% of the excess is included as assessable income and taxed at the individual's marginal
tax rate.