Overview
This article will look at how to do the following in SF 360:
 Record a market linked pension
 Enter pension payments for a market linked pension
Determining the original term
Important: Simple Fund 360 will automatically calculate the Orignal Term, however, users have the ability to overwrite the original term when the pension is processed in Simple Fund 360.
To determine the original term, follow the steps below:
 Determine the age of the pension member at the Pension start date
 Using the following tables published by the Australian Government Actuary, determine the additional life expectancy for the member:
4.9.5 Life Expectancy, Pension Valuation Factor & Payment Factor Tables  Round up the life expectancy amount (at step 2) to the nearest number
Example
John Jones, a member of the fund, commences a nonreversionary pension on 1 July 2014.
John Jones is 65 years old as of 1 July 2014.
The original term will be calculated as follows:
 John Jones is 65 years old
 Refer to the Life Expectancy Table produced by the Australian Government Actuary.
It can be seen that an extra approximately 18 years of life expectancy is anticipated on average for a Male of 65 years of age whose pension payments commenced on or after 01/01/2010 to 31/12/2014:  John's total life expectancy would be:
=18.54
≈ 19
This will be the original term of the marketlinked pension.
Other available terms
The above example has shown you how to determine the original term for a given individual using their age and gender.
When creating a marketlinked pension, other suitable original terms can be recorded in Simple Fund 360. Which original term you choose will depend on the annual entitlement payment amount and duration required for the member.
If the pension being created will have a beneficiary on record, the beneficiary's life expectancy may also be used when recording the original term. The beneficiary is most often the spouse of the member.
The other original terms available are:
 Life Expectancy of the pension member
 Life Expectancy of pension member + 5 years
 Spouse Life Expectancy
 Spouse Life Expectancy + 5 years
 Life Expectancy of pension member up to 100 years old
 Life Expectancy of spouse up to 100 years old
Creating the account
To record a marketlinked pension with an initial term of 84 years in Simple Fund 360:
Navigate to the Member List screen:
From the Main Toolbar, go to Member.  
Select Member list. 
From the Member List screen click New Member Account and select New Pension Member
Record the start date as 01/07/2014
Ensure that the correct start date is entered as this can be difficult to change later
Set the Pension Account Type as Market Linked Pension
Ensure the appropriate accumulation account is selected
Original Term Users can Leave blank the original term field and Simple Fund 360 will automatically calculate the Original Term for the member.
If an amount is entered here, Simple Fund 360 will then use this term for its pension calculation.

Ensure the correct Rollover Components and Preservation Amounts are entered
Click Save
Recording the pension payments
Simple Fund 360 will automatically calculate the Minimum and Maximum annual pension amounts using the original term entered when setting up the market linked pension account.
These amounts can be viewed by navigating to the Pension Dashboard screen
From the Main Toolbar, go to Member.  
Select Pension Dashboard from the list. 
To pay a pension amount of $30,000 to John, the following journal would be recorded:
Account

Code

Debit ($)

Credit ($)


Pensions Paid  41600/John  30,000  
Bank  60400/BankCode  30,000 
Calculation of the minimum pension payment
The minimum annual payment amount is worked out by multiplying the member’s pension account balance by a percentage factor. The amount is rounded to the nearest 10 whole dollars. If the amount ends in an exact 5 dollars, it is rounded up to the next 10 whole dollars.
Also, introduced by the Simplified Superannuation reforms in 2007 was that market linked pensions commenced after 20 September 2007 must also satisfy the minimum pension standards for accountbased pensions in addition to the market linked income payment rules.
Temporarily reducing superannuation minimum payment amounts
For the 2019–20 and 2020–21 years, the government reduced the minimum superannuation payment requirements for accountbased pensions and similar pensions (including Market Linked pensions) by 50%.
Determining the Member's Age
The member's age is determined at either:
 1 July if there is an exsisting pension, or
 the Commencement Day of the pension (if the pension starts in the current financial year) .
Member's Account Balance
Account balance is either:
 the pension account balance on 1 July for an exsisting pension
 the balance of the pension on the commencement day (if the pension starts in the current financial year), or
 the amount of the withdrawal benefit, if the amount of the pension account balance is less than the withdrawal benefit that the member would be entitled to if the pension were to be fully commuted.
Where the pension commences after 1 July, the minimum payment amount for the first year is calculated proportionately to the number of days remaining in the financial year, starting from the commencement day.
To calculate this, multiply the minimum pension payment amount by the remaining number of days in the financial year and divide by 365 (or 366 in a leap year).
Minimum annual payment amount × (remaining number of days ÷ 365 (or 366)).
If the pension commences on or after 1 June in a financial year, no minimum payment is required to be made for that financial year.
Satisfying the minimum pension standards for accountbased pensions
Introduced by the Simplified Superannuation reforms in 2007 was that market linked pensions commenced after 20 September 2007 must also satisfy the minimum pension standards for accountbased pensions in addition to the market linked income payment rules.
Simply, this means that the Minimum amount calculated for the Market Linked Pension is compared with the Minimum amount calculated for the pension using the AccountBased Pension rules. The pension account will then use the greater amount of the two as its minimum annual payment amount.
For more information, check out ATO: Minimum Pension Payments.