An actuary’s certificate provides the fund’s tax exempt percentage, which is calculating the proportion of the
assets supporting the pensions for the year. Whether or not a fund is required to obtain an actuary’s
certificate depends on the particular circumstances in that financial year. Generally, if a fund has a member
accumulating benefits as well as assets supporting a pension benefit, a fund is required to receive an actuarial
certificate to claim an exemption from income tax. Where the fund is unsegregated and has both
accumulation and pension assets on any one day during the year, an actuary’s certificate is required if the fund
wishes to claim exempt current pension income. A defined benefit fund must obtain an actuary certificate
each year regardless of the circumstances.
There are situation where an actuary’s certificate is not needed such as where assets are segregated or where
a contribution was converted to a pension on the same day. If all members’ accumulation balances are
converted to pensions on 1st July in the year and no other contributions or rollovers are made in the year, an
actuary’s exempt percentage certificate may not be necessary. To be considered fully segregated, assets must
be physically segregated and not merely done so via accounting entries, requiring separate bank accounts for
the pension and accumulation assets. A fund completely in pension with no contributions, rollovers or
reserves is considered to be fully segregated and an actuary certificate is not required.
Always talk to your accountant or advisor to ensure you comply with the requirements for this income tax
exemption and look for an experienced and reputable actuary.