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Hi Experts
I am doing an audit of a superfund. The members are retired and do not work. However, they have not withdrawn any pension out of their superfund. I assume they have never withdrawn pension earlier. My question is that is it compulsory to withdraw minimum pension after preservation age? If they have not withdrwan any pension have they breached any sections of SIS Act or regulations?
Please also advise in the above case if they have withdrawn pension but partial then what would be the implications?
Thanking you in advance for your insight.
Kind regards,
Dipak Mehta
Hi Dipak
The SIS legislation does not make it compulsory to commence an account based pension when a member meets a condition of release. It is possible that a Fund's trust deed could require a pension to be paid at a certain age although I have never seen this in practice.
If a partial pension has been paid there are 2 options. The first option is that it is treated as being a lump sum payment and the members accounts remain in accumulation mode. The second option is that only part of their benefits are transferred to pension mode. If the Fund has accumulation and pension accounts the Fund will be required to obtain an actuarial certificate on an annual basis.
Thanks
The Auditors Institute