Overview
This article will go over the steps required to commence a pension starting partway through the year (other than 1 July). Additionally, how to obtain an Actuary Certificate for partway pension commencements.
Steps
Step 1: Record income and expenses prior to pension commencement.
To commence a pension partway through a year, you must process all transactions until the date of the pension commencement.
Transactions can be processed through a combination of automated and manual methods.
This includes regularly uploading and matching transactions via the Smart Matching screen:
Step 2: Writeback of Tax Affect Accounting (Optional).
See Tax Effect Accounting for instructions
Please Note: If you choose to use tax-effect accounting (for example, if you have a fund with both pension and accumulation members), you will need to write back a proportion of PDIT that relates to the pension members' proportion of assets.
This would require you to calculate the proportion and reduce the relevant amount from PDIT, clearing against the 49300/MEMBERCODE account for the pension member.
The pension members proportion of assets can be calculated using the members weightings in the fund.
Step 3: Create entries to the last day before pension commencement.
Refer to The Create Entries Process).
Step 4: Commence the Pension.
See Commencing a Pension for instructions.
Step 5: Requesting an Actuarial Certificate (Optional).
Commencing a pension partway through the year may require the fund to obtain an Actuarial Percentage depending on the situation.
To learn how to request an Actuarial Certificate, see Fund Pension Policies / Actuarial Certificates for instructions.
Once the Actuarial Certificate has been received or the actuarial details have been entered manually, you will need to create entries so the actuarial percentages are reflected in the year-end calculations. If the Entries have been created to the end of the year, you will need to reverse the final part of the create entries. (For example, between the Pension Commencement and 30 June).
Please note you do not need to reverse all entries. If you have reversed all entries, you will still need to create entries to the day before the pension commencement.