| DOUBLE YOUR REASONABLE BENEFIT LIMIT IN YOUR DIY SUPERANNUATION FUND |
Prior to this it was not accepted that self managed funds could provide the certainty necessary for a complying pension. The reasonable benefit limit (‘RBL’) (other than for those old enough and lucky enough to have established a special RBL) for a lump-sum or for an allocated pension is $471, 088. For a complying pension it is twice that amount — $942, 175. An actuary’s certificate must be obtained each year for a complying pension and it means that conservative investment policies must be adopted. The actuary must be satisfied that the pension can be maintained and not reduce during the lifetime of the pensioner to a "very high degree of probability". There is never any question of this with regard to complying pensions purchased from an insurance company because of the substantial asset base of the insurance company, but with a self managed superannuation fund a constant review has to be made of the ability of the fund to deliver a pension which will not decrease in later years. Any pension monies left after the death of the pensioner can be paid across as a pension to the pensioner’s spouse and if there are still monies left on the death of the spouse, the fund can be wound up and paid into the estate of the last member. Alternatively, the benefits in the fund can be spread across any remaining members. Self managed funds are limited to four members in any case. To the issue of a complying pension it would be necessary to review the assets of the fund and discuss them with the actuary. The actuary could then advise as to what steps should be taken in future to satisfy him that he can continue to give certificates each year. A well run fund should have no problems. George Gell |
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