Commonwealth Consolidated Acts Commonwealth Consolidated Acts(1) This section applies if:
(a) at the operative time, standard pension is not payable in respect of the original interest; and
(b) the original interest is not an entitlement to associate deferred benefits.
Reduction of accumulated contributions etc.
(2) The following amounts are reduced in respect of the original interest:
(a) the accumulated basic contributions are reduced by the sum of:
(i) the basic contributions component; and
(ii) the interest accruing on that component after the operative time;
(b) the accumulated supplementary contributions are reduced by the sum of:
(i) the supplementary contributions component; and
(ii) the interest accruing on that component after the operative time;
(c) the accumulated employer contributions are reduced by the sum of:
(i) the employer contributions component; and
(ii) the interest accruing on that component after the operative time;
(d) any benefit under section 110SN is reduced by the sum of:
(i) the section 110SL component; and
(ii) the interest accruing on that component after the operative time;
(e) any benefit under section 130D is reduced by the sum of:
(i) the section 130B component; and
(ii) the interest accruing on that component after the operative time.
Reduction of later salary - based pension
(3) If, after the operative time, salary - based pension (the original pension ) becomes payable to the member spouse in respect of the original interest, then the annual rate of the original pension is reduced to the amount worked out using the formula:
Note: If the member spouse dies without becoming entitled to salary - based pension, then subsection (3) will nevertheless result in an indirect reduction of any spouse's pension that becomes payable to a surviving spouse. This happens because the amount of the spouse's pension is based on the amount of invalidity pension (salary - based pension) that would have become payable to the member spouse at the time of death.
Multiple interest splits for same original interest
(4) If, before the original pension becomes payable, the original interest has been split more than once (that is to say, section 146MB has applied more than once), then, in applying the formula in subsection (3), the reduction factor is to be replaced by the number calculated using the following steps, based on the chronological order of the operative times (starting with the earliest):
(a) calculate a factor (the interim factor ) using the steps in paragraphs (a) to (c) of the definition of reduction factor in subsection (6);
(b) calculate a factor (the interim factor ) for the next split (the current split ), using the formula:
where:
unreduced current factor means the number calculated using the steps in paragraphs (a) and (b) of the definition of reduction factor in subsection (6);
(c) calculate a factor for each remaining split (if any), using the formula in paragraph (b);
(d) add together the factors calculated under paragraphs (a) to (c).
Reduction not to affect later non - standard pension
(5) A reduction under subsection (3) is to be disregarded in calculating the amount of any non - standard pension that later becomes payable.
Note: For example, the reduction will be disregarded in calculating the amount of orphan pension payable in respect of a child of the member spouse after the member spouse's death.
(6) In this section:
"age factor" means:
(a) if the age in full years is 65 or more--1; or
(b) if the age in full years is less than 65--1 reduced by 0.02 per year from 64 years to 60 years, and then by 0.03 per year from 59 years to 31 years.
"final salary amount" means the number of whole dollars in the member spouse's final annual rate of salary.
"original pension amount" means the number of whole dollars in the original pension.
"reduction factor" means the number worked out as follows:
(a) calculate a number (the service factor ), by reference to the member spouse's period of contributory service before the operative time, by adding:
(i) for service that occurred within the first 20 years:
(A) 0.02 for each full year; and
(B) 0.02/365 for each left - over day; and
(ii) for service that occurred within the next 10 years:
(A) 0.01 for each full year; and
(B) 0.01/365 for each left - over day; and
(iii) for service that occurred within the next 10 years:
(A) 0.0025 for each full year; and
(B) 0.0025/365 for each left - over day;
(b) if the original pension is age retirement pension or early retirement pension, multiply the service factor by the age factor (based on the member spouse's age in full years at the time when the original pension became payable);
(c) multiply the number worked out under paragraphs (a) and (b) by the transfer factor.
"salary-based pension" means a pension that is calculated by reference to the member spouse's final annual rate of salary.