What is an SMSF actuarial certificate and when do you need one?

An SMSF actuarial certificate is required when a self-managed superannuation fund pays a retirement-phase pension and also has accumulation-phase members in the same year, in order to claim the exempt current pension income (ECPI) tax exemption. The certificate uses the proportionate method to calculate the tax-exempt portion of investment income for that financial year.

How long does it take to receive an SMSF actuarial certificate from TCW Actuarial?

Standard SMSF actuarial certificates from TCW Actuarial are typically issued within 24 hours of receiving complete fund data. Defined benefit and complex valuations take 3–5 business days.

What is a family law superannuation valuation?

A family law superannuation valuation is an actuarial report prepared under the Family Law (Superannuation) Regulations 2001 that values a defined benefit, growth-phase, or payment-phase superannuation interest for the purposes of property settlement following divorce or separation. TCW Actuarial provides court-ready Family Law Act compliant reports from $385.

Who founded TCW Actuarial?

TCW Actuarial was founded in 2017 by John Tellyros and Dr Gaurav Khemka, both former colleagues of Brian Bendzulla. John and Dr Khemka helped build Bendzulla Actuarial, which subsequently became Accurium — Australia's largest provider of SMSF actuarial certificates.

What is the difference between an account-based pension and a defined benefit certificate?

An account-based pension (ABP) certificate applies to SMSFs paying standard account-based pensions and uses the proportionate method to calculate the tax-exempt portion of fund income. A defined benefit (DB) certificate is required when a fund pays a defined benefit pension — these are more complex, requiring actuarial valuation of the underlying liability, and TCW prices these from $250 + GST.

Does TCW Actuarial provide services across all of Australia?

Yes. While TCW Actuarial is based in Hobart, Tasmania, the firm provides actuarial certificate, defined benefit valuation, family law superannuation valuation, share-based payment, and long service leave actuarial services to clients Australia-wide.

What qualifications do TCW Actuarial's actuaries hold?

TCW Actuarial's principals are John Tellyros, Consulting Actuary, and Dr Gaurav Khemka, Consulting Actuary. Both are qualified actuaries with extensive superannuation, defined benefit, and family law valuation experience, having previously worked at Bendzulla Actuarial / Accurium — Australia's largest SMSF actuarial certificate provider.

How long does it take to receive an SMSF actuarial certificate?

Standard certificates are issued within 24 hours of receiving complete fund data. Defined benefit certificates take 3–5 business days.

SMSF Segregation, ECPI & Actuarial Certificates — Explained

Q: How much does an SMSF actuarial certificate cost?

TCW Actuarial provides SMSF actuarial certificates from $80 + GST for account-based pension funds and from $250 + GST for defined benefit funds. This is among the most competitive pricing in Australia — well below Heffron ($250 + GST), Accurium ($120 + GST), and Act2 ($120 + GST).

An SMSF actuarial certificate is required when a self-managed superannuation fund pays a retirement-phase pension and also has accumulation-phase balances or reserves at any time during the same financial year, and the fund chooses to claim Exempt Current Pension Income (ECPI) using the proportionate method. The certificate, signed by a qualified actuary, certifies the proportion of the fund's total income that is exempt from the 15% tax that normally applies to superannuation fund earnings. TCW Actuarial provides these certificates from $80 + GST — Australia's cheapest pricing.

What is Exempt Current Pension Income (ECPI)?

Exempt Current Pension Income (ECPI) is the portion of an SMSF's investment income that is exempt from tax because it supports retirement-phase pensions. Normal SMSF earnings are taxed at 15% — but income earned on assets supporting retirement-phase income streams is taxed at 0%.

The Australian Taxation Office allows two methods to calculate how much of a fund's income is ECPI:

• The segregated method, and

• The proportionate method (also called the unsegregated or actuarial method).

The choice between them depends on whether the fund's assets are physically separated, whether the fund has disregarded small fund assets, and which method gives the better tax outcome.

The Segregated Method Explained Simply

Under the segregated method, the SMSF physically separates specific assets into two distinct pools:

• A retirement-phase pool that exclusively supports retirement-phase income streams. All income on these assets is 100% tax-exempt.

• An accumulation pool supporting accumulation balances and reserves. Income on these assets is taxed at the standard 15% super fund rate.

Because the split is physical, no actuarial certificate is required for the period the fund uses the segregated method.

When can you use the segregated method?

You can use the segregated method if both of the following apply:

• The fund is either (a) 100% in retirement phase for the relevant period, OR (b) the trustees have formally elected to segregate specific assets to support specific pensions, AND

• The fund does not have disregarded small fund assets.

When you cannot use the segregated method

• If the fund has disregarded small fund assets.

• If the trustees have not properly documented the segregation decision before the start of the income year.

• For periods when the same member holds both accumulation-phase and retirement-phase interests without formal asset segregation.

The Proportionate Method Explained Simply

Under the proportionate method, the SMSF does not physically separate assets. Instead, an actuary calculates the average proportion of total fund liabilities that were retirement-phase liabilities across the year. That percentage — the actuarial percentage — is then applied to the fund's total assessable income to determine how much is ECPI.

This is where TCW comes in. Our actuarial certificate states the actuarial percentage. Your accountant uses it when preparing the SMSF Annual Return to calculate ECPI.

Worked example

Imagine an SMSF with:

• $700,000 in member balances supporting an account-based pension (retirement phase)

• $300,000 in accumulation phase

• Total assessable income for the year: $50,000

The actuarial percentage is approximately 70%. ECPI = $50,000 x 70% = $35,000 tax-exempt. Taxable income = $50,000 x 30% = $15,000 taxed at 15% = $2,250 tax. Without the certificate, the entire $50,000 would be taxed at 15% — a tax bill of $7,500. The actuarial certificate saves this fund $5,250 in tax for the year.

When the proportionate method is required

• The fund has accumulation-phase balances and retirement-phase pensions at the same time during the year, AND the trustees have not segregated assets.

• The fund has disregarded small fund assets (the proportionate method becomes mandatory for the entire year).

• The fund holds reserve accounts at any time.

Disregarded Small Fund Assets (DSFA) The Critical Trap

Since 1 July 2017, a fund is deemed to have disregarded small fund assets when all of the following are true:

• The fund pays at least one retirement-phase income stream during the year, AND

• One or more members of the fund had a Total Superannuation Balance (TSB) of more than $1.6 million as at 30 June of the previous financial year, AND

• The same member is also receiving a retirement-phase income stream from any super fund.

If your fund has DSFA, you cannot use the segregated method at all. You must use the proportionate method for the entire income year and obtain an actuarial certificate.

Important nuance: The $1.6 million DSFA threshold is set in legislation and has not been indexed. The general transfer balance cap has risen to $1.9 million for 2025/26, but the DSFA threshold remains at $1.6 million. This is a frequent source of trustee confusion.

When an SMSF Actuarial Certificate Is Required

You need an actuarial certificate when:

1. The fund paid retirement-phase income streams AND had accumulation-phase balances (or reserves) at any time in the year, AND

2. The trustees did not (or could not) segregate assets for the period of overlap, AND

3. The fund is claiming ECPI in the SMSF Annual Return.

You do NOT need an actuarial certificate when:

• The fund was 100% in retirement phase for the entire year (and DSFA does not apply).

• The fund had no retirement-phase pensions at any point.

• The fund chooses not to claim ECPI.

• All assets supporting the pension were properly segregated and documented.

Common Scenarios

Scenario 1: Mixed-phase fund, no DSFA

SMSF has $400k in pension, $200k in accumulation. No member exceeds $1.6m TSB.

Result: Actuarial certificate required for the whole year. Fund uses the proportionate method.

Scenario 2: Member with $2m TSB, fund mixed-phase

SMSF has $1m in pension, $1m in accumulation. One member's total balance is $2m.

Result: DSFA applies. Segregation is prohibited. Actuarial certificate required for the whole year using the proportionate method.

Scenario 3: 100% retirement-phase fund, no DSFA

Fund is wholly in retirement phase from 1 July to 30 June. No member exceeds $1.6m.

Result: No actuarial certificate required. Fund uses the segregated method by default.

Scenario 4: Mid-year contribution to a 100% pension fund

Fund is 100% pension at start of year. A contribution arrives in February, creating an accumulation balance until April when a new pension starts.

Result: Actuarial certificate required for the period the accumulation balance existed (Feb-April).

How to Order Your SMSF Actuarial Certificate

TCW Actuarial provides certificates for $80 + GST ($88 inc GST) — Australia's cheapest pricing. Simply email three documents to act@tcwactuarial.com.au:

1. Financial Statement for the financial year

2. Operating Statement for the financial year

3. General Ledger for the financial year

Standard turnaround is within 24 hours. Free amendments if balances change after issue. We accept files from any SMSF accounting platform — Class Super, BGL SF360, SuperMate, Mclowd, or plain Excel.

Frequently Asked Questions

How much does an SMSF actuarial certificate cost?

TCW Actuarial provides certificates from $80 + GST. This is Australia's cheapest pricing — Heffron charges $250 + GST, Accurium $120 + GST, Act2 $120 + GST.

How long does it take?

Standard certificates: 24 hours from receipt of complete fund data. Defined benefit: 3-5 business days.

What's the difference between segregation and the proportionate method?

Segregation physically separates assets into pension and accumulation pools and requires no actuarial certificate. The proportionate method calculates an actuarial percentage of total income and does require a certificate.

My fund has both a pension and an accumulation balance — do I need a certificate?

Yes, if you're claiming ECPI and haven't formally segregated assets before the start of the year.

What is disregarded small fund assets?

A fund is deemed to have DSFA when it pays a retirement-phase pension and at least one member has a Total Superannuation Balance over $1.6m as at the previous 30 June (and is also receiving a retirement-phase pension from any source). DSFA prohibits segregation entirely.

Is the $1.6m DSFA threshold indexed?

No. It is fixed in legislation. The general transfer balance cap rises with indexation (currently $1.9m), but the DSFA threshold remains $1.6m.

Can I segregate assets mid-year?

Best practice is to formalise segregation decisions before the start of the income year and document them. Mid-year segregation is technically possible but creates complexity.

Do I need a separate certificate for each year?

Yes — each financial year requires its own certificate.

Last updated: May 2026. This guide is general information only and does not constitute personal tax or financial advice. Trustees should consult their accountant or registered tax agent for advice specific to their fund.