The Federal Government released today its Mid-Year Economic and Fiscal Outlook (MYEFO), noting that the delayed 2020 Federal Budget was only released on 6 October 2020. There was an interesting proposed change to enable the partial commutation of certain non-commutable pensions included in the MYEFO papers.

SMSFs paying legacy defined benefit pensions require an actuarial valuation each year to ensure they remain solvent. Upcoming solvency tests will be based on asset values as at 30 June 2020. Despite a partial recovery in equity markets since the lows of March, prices have been impacted across almost all asset classes.

Various industry bodies, including the SMSF Association and the Tax Institute, have all raised the need for reform to help retirees trapped in legacy income streams in self-managed superannuation funds (SMSFs). The Actuaries Institute has now joined the chorus for change with its own submission to Treasury.