Military Superannuation and Benefits Trust Deed Amendment 2011 (No. 1) (Cth)

Military Superannuation and Benefits Trust Deed Amendment 2011 (No. 1)¹

Military Superannuation and Benefits Act 1991

I, WARREN SNOWDON, Minister for Defence Science and Personnel, make this instrument under subsection 5 (1) of the Military Superannuation and Benefits Act 1991.

Dated 23 June 2011

WARREN SNOWDON

Minister for Defence Science and Personnel

Name of instrument

This instrument is the Military Superannuation and Benefits Trust Deed Amendment 2011 (No. 1).

Commencement

This instrument commences on the commencement of the Governance of Australian Government Superannuation Schemes Act 2011.

Amendment of Military Superannuation and Benefits Trust Deed

(1) Schedule 1 amends the Military Superannuation and Benefits Trust Deed.

(2) The amendments made by Schedule 1 do not apply in the period starting on commencement of this instrument and ending on the day the instrument is registered to the extent that:

(a) the rights of a person (other than the Commonwealth or an authority of the Commonwealth) as at the date of registration would be affected so as to disadvantage that person; or

(b) liabilities would be imposed on a person (other than the Commonwealth or an authority of the Commonwealth) in respect of anything done or omitted to be done before the date of registration.

Schedule 1 Amendments

(clause 3)

[1] Trust Deed, clauses 1 to 12

substitute

Interpretation

(1) In this Deed, where the context requires or admits, a reference to the Deed shall include a reference to the Rules, as set out in the Schedule (in this Deed called the Rules), and the Rules shall form part of the Deed. In the case of an inconsistency between the provisions of the Deed and the Rules, the provisions of the Deed shall prevail.

(2) In this Deed, where the context requires or admits, words and expressions defined in the Act or the Rules have the same meanings when used in the Deed. The headings in this Deed and the Rules are for the convenience of reference only and shall not affect their interpretation.

(3) In this Deed Minister means:

(a) the Commonwealth Minister of State for Defence;

(b) if 2 or more Commonwealth Ministers administer Departments which have functions in relation to the administration of matters to which the Deed relates, the Minister who administers the Department which has the function in relation to each of those matters; or

(c) a member of the Executive Council acting for the time being for and on behalf of any of those Ministers.

Establishment of the Superannuation Scheme and the Fund

(1) An occupational superannuation scheme, known as the Military Superannuation and Benefits Scheme (in this Deed called the Superannuation Scheme), in force on 1 October 1991, has been established for the benefit of:

(a) members of the Permanent Forces; and

(b) members of the Reserves rendering continuous full-time service;

and, from 1 July 2011, is to be administered in accordance with the Deed by CSC.

(2) A fund, known as the Military Superannuation and Benefits Fund No. 1 (in this Deed called the Fund), has been established for the purposes of the Superannuation Scheme and, from 1 July 2011, vested in CSC.

Functions and powers of CSC

(1) The functions of CSC are to administer the Superannuation Scheme and to manage and invest the Fund in accordance with the provisions of the Act and this Deed including, without limiting the generality of the foregoing, the following functions:

(a) to pay benefits to or in respect of members, and to make payments to and receive payments from the Commonwealth, as provided for in the Act;

(b) to provide advice to the Minister on proposed changes to the Act and the Deed;

(c) to determine interest rates for the purposes of the Superannuation Scheme;

(d) to determine, from time to time, the issue price and withdrawal price of a unit in an Investment Division of the Fund.

(2) CSC has power in Australia and elsewhere to do all things necessary or convenient to be done for, or in connection with, the performance of its functions and, in particular, may do any of the following:

(a) give guarantees;

(b) underwrite or sub‑underwrite any form of investment including the underwriting or sub‑underwriting of the issue of shares, debentures or units in a unit trust;

(c) borrow moneys and give security over the whole or any part of the assets of the Fund;

(d) appoint agents and attorneys;

(e) act as agent for other persons;

(f) engage consultants and investment managers;

(g) establish an Incapacity Classification Committee to determine members’ incapacity classifications under the Rules;

(h) establish one or more Reconsideration Committees:

(i) to examine and report on decisions of CSC and its delegates under the Rules relating to members’ entitlements to benefits; and

(ii) to reconsider decisions of CSC and its delegates under the Rules relating to members’ entitlements and benefits;

(i) establish one or more other committees to assist CSC on any matter within the CSC’s functions and powers, including in relation to the investment of the Fund;

(j) take action to control or manage, or to enhance or protect, the value of, any investment made out of the Fund, or to enhance or protect, the return on any such investment.

(3) Subject to the SIS Act, in exercising its functions and powers CSC must have regard to:

(a) the interests of members and the Commonwealth; and

(b) any statement of policy of the Commonwealth Government on any matter that is relevant to the performance of the functions, duties and powers of CSC by the Minister with a request that CSC consider that policy.

Operation of the Fund

(1) All contributions and other moneys paid to CSC, or as directed by CSC, shall be held in trust by CSC in the Fund. The Fund shall be managed and invested by CSC in accordance with the Act and the Deed.

(2) The Fund shall comprise:

(a) contributions made by members;

(b) contributions made by the Commonwealth pursuant to the Act and the Deed;

(c) any other moneys paid or transferred to CSC pursuant to the Act and the Deed or which become subject to the trusts of the Deed;

(d) the income arising from investments; and

(e) any accretions to or profits on realisation of investments.

(3) The Fund shall be used by CSC to pay benefits to or in respect of members, to make payments to the Commonwealth in respect of members’ benefits as provided for in the Act and to pay the costs and expenses of the management and investment of the Fund.

Investment of the Fund

(1) For the purposes of this clause:

(a) invest means expend moneys with a view to obtaining a present or future financial return (whether by way of income, profit or otherwise); and

(b) profit includes capital profit.

(2) Moneys standing to the credit of the Fund which CSC, after consultation with its investment manager, is of the opinion are moneys that are not for the time being required for the purpose of making payments out of the Fund under the Act and the Deed shall, so far as is practicable, be invested by CSC in accordance with the Act and the Deed, but CSC shall so manage the Fund that moneys that are from time to time required to pay benefits that are payable out of the Fund are available for that purpose.

(3) Moneys that, by virtue of subclause (2), are required to be invested by CSC may be invested in any manner and, without limiting the generality of the foregoing, may be invested by CSC jointly with another person or other persons.

(4) CSC must:

(a) establish at least one Investment Division of the Fund as the means of investing the Fund; and

(b) establish an investment strategy for each Investment Division; and

(c) regularly review the effectiveness of each Investment Division and investment strategy; and

(d) maintain records to identify the assets, liabilities and income of each Investment Division; and

(e) maintain records to identify payments made from each Investment Division.

(4A) CSC may:

(a) create an Investment Division; or

(b) refuse to issue further units for an Investment Division; or

(c) wind up an Investment Division; or

(d) merge 2 or more Investment Divisions; or

(e) divide an Investment Division into 2 or more Investment Divisions;

if CSC decides that it is necessary or desirable to do so.

(4B) In acting under subclause (4A), CSC may consult any person or body.

(4C) If CSC decides to act under subclause (4A), CSC must give the unitised members who would be affected by the action reasonable notice of the action before the action takes effect.

(5) CSC shall invest moneys standing to the credit of the Fund that are available for investment only through an investment manager or managers who undertake to invest, and manage the investment of, those funds on behalf of CSC.

(6) CSC shall ensure that any investment manager:

(a) operates within the investment powers of CSC and the investment strategy and policy as determined for the time being by CSC; and

(b) reports to CSC on the state of CSC’s investments and the investment market at such times and in such manner as CSC determines.

10A Unitisation of Investment Divisions

CSC must:

(a) divide each Investment Division of the Fund into units; and

(b) issue units to each unitised member that represent the member’s beneficial interest in the fund; and

(c) record the issue, withdrawal and transfer of the units of each member in a unit record system maintained by CSC for the Fund.

Requests by Minister for Information

CSC shall furnish to the Minister such information relating to the general administration and operation of the Superannuation Scheme and the Fund as the Minister may from time to time require.

Delegation by CSC

CSC may by instrument under its seal delegate all or any of its powers under the Deed to a person or committee mentioned in subsection 36 (1) of the Governance of Australian Government Superannuation Schemes Act 2011, other than its powers under Part 9 of the Rules and this power of delegation.

[2] The Schedule

substitute

Schedule Military Superannuation and Benefits Rules

(clause 1)

Part 1 Preliminary

Citation

These Rules may be cited as the Military Superannuation and Benefits Rules.

Definitions and interpretation

(1) The following expressions are defined or interpreted, for the purposes of these Rules, in the Glossary in Schedule 1. Unless otherwise stated, the expressions are in Part 1 of the Schedule.

1948 Act

1973 Act

1973 Scheme

1973 Scheme (deferred benefit) re‑entrant

1973 Scheme (invalidity pay) re‑entrant

1973 Scheme re‑entrant

1973 Scheme (refunded contributions) re‑entrant

1973 Scheme (retirement pay) re‑entrant

1973 Scheme retirement pensioner

1991 Scheme

1991 Scheme re‑entrant

Actuary

aggregated service

allocation

allowance

ancillary

ancillary benefit

associate

associate A benefit

associate B benefit

associate pension

bank

Board

calendar month

carry over value

child

classification

Committee

contribution

contributory service

CSC

default Investment Division

Department

DFRDB member

eligible child

eligible service

employer benefit

employer funded account

final average salary

financial year

flying allowance

foreign service member

Fund

funded employer benefit

higher duties allowance

invalidity

invalidity pension

invalidity pensioner

invalidity retiree

Investment Division

investment nomination

issue price

lump sum maximum benefit limit

marital or couple relationship (see Part 1A)

MBL member

member

member benefit

member funded account

member unfunded account

membership

month

net asset value

Parliamentary Candidates Act

pension

pension maximum benefit limit

Permanent Forces

prescribed fee

prescribed half‑year

prescribed year

preservation age

previous contributions

previous legislation

regulated superannuation fund

relevant percentage

relevant period

relevant provision

Reserves

resign to contest an election (see Part 2)

retirement (see Part 3)

retirement on completion of limited tenure employment (see Part 3A)

retirement pensioner

retiring age (see Part 4)

salary (see Part 10)

Scheme

service

service allowance

service offence

SIS preservation threshold amount

SIS Regulations

special action forces allowance

specialist operations allowance

spouse who survives a deceased person (see Part 5)

spouse’s pension

Statistician

submarine service allowance

surcharge debt account

surcharge deduction amount

total benefit

trainee allowance

transfer

transfer application

transferred person

transferred (former recipient) person

transferred (refunded contributions) person

transfer value

unfunded preserved benefit

unitised member

unit value

withdrawal price

(2) Interpretations of the following matters, for the purposes of these Rules, are provided in Parts 6 to 9 of Schedule 1:

Part 6 Parts of speech and grammatical forms

Part 7 Number

Part 8 Reckoning of time

Part 9 Attainment of particular age.

Part 2 Contributions

Contributions by members

(1) A member is required to pay a contribution each fortnight in accordance with this Division.

(2) Where contributions by a member fall due during a period when he or she is on leave without pay, the member, or a person acting on his or her behalf, is to pay those contributions:

(a) each fortnight; or

(b) in such instalments and at such times as CSC approves; or

(c) with the approval of CSC, in a lump sum.

Amount of contributions

(1) Subject to subrule (2), the amount of the contribution payable by a member in a fortnight is an amount equal to the relevant percentage of the amount of the salary paid to the member in that fortnight.

(2) Where a member elects under subrule (10) to vary the amount of the contribution payable by him or her, that election has effect in relation to the first salary fortnight in relation to which it can be applied in the ordinary course of business.

(3) Where a member makes an election under subrule (10), the member is not entitled to make a further election until the expiration of a period of three months after the day on which the earlier election was made.

(4) For the purposes of subrule (1), salary is taken not to be paid to a member in respect of a day included in a period that, in accordance with Schedule 2, is a prescribed period.

(5) Where:

(a) the salary of a member in respect of a period is forfeited, in whole or in part, under regulations made under the Defence Act 1903; and

(b) the period does not exceed 21 consecutive days;

the amounts of the contributions payable by the member in respect of that period are to be calculated as if the member were on full pay.

(6) Subject to subrule (7), where a member who is granted:

(a) long service leave on half pay; or

(b) leave without pay for a period not exceeding 21 days;

the amounts of the contributions payable by the member in respect of that period are to be calculated as if the member were on full pay.

(7) In a case to which paragraph (6) (b) applies, the member’s salary for the purpose of calculating the contribution payable by the member is taken not to include an allowance unless:

(a) the allowance was payable to the member on the day immediately preceding the commencement of the period; and

(b) an appropriate authority of the Defence Force has notified CSC that, but for the member’s absence on leave without pay, the allowance would have been payable to the member in respect of the whole of the period of his or her absence on that leave.

(8) In calculating the amount of a contribution payable by a member, the calculation is to be made as if no deductions were made from the member’s salary.

(9) Where the amount of a contribution payable by a member includes a fraction of a cent:

(a) if the fraction is less than one‑half of a cent — the contribution is taken to be reduced by the amount of the fraction; or

(b) if the fraction is one‑half of a cent or more — the contribution is taken to be increased by treating the fraction as one cent.

(10) In this rule:

relevant percentage, in relation to a member, means:

(a) the percentage, being a whole number that is not less than 5 and not more than 10, elected by the member; or

(b) if the member has not made an election — 5 per centum.

Cessation of contributions on reaching maximum benefit limit

(1) A member is not entitled to pay contributions after he or she has been notified that his or her total benefit has equalled or exceeded his or her pension maximum benefit limit.

(2) At any time after a member is notified that his or her total benefit has equalled or exceeded his or her lump sum maximum benefit limit, he or she may elect to cease paying contributions.

(3) This rule applies in spite of anything in this Part.

(4) This rule does not apply to benefits payable under Part 12 or Part 13 or contributions made under Part 14.

Contributions while on leave without pay in connection with birth of child etc

A member who is on leave without pay for a period exceeding 21 days which was granted to him or her in connection with:

(a) the birth of a child of the member; or

(b) other termination of the pregnancy of the member; or

(c) the adoption of a child by the member;

may, before the expiration of the period of leave without pay, elect to pay contributions, calculated as if the member were on full pay, in respect of so much of that period, not exceeding 9 months, as is specified in the election.

Contributions while on other leave without pay

(1) This rule does not apply to a period of leave without pay to which rule 6 applies.

(2) Where a member who is on leave without pay for a period exceeding 21 days which was granted to him or her:

(a) for the purpose of the member:

(i) engaging, with the approval of the appropriate authority of the Defence Force, in full time employment; or

(ii) undertaking further education; or

(iii) undergoing training; or

(iv) engaging in some other activity;

and, in the case of subparagraph (ii), (iii) or (iv), an appropriate authority of the Defence Force has notified CSC that the education, training or other activity is relevant to the requirements of the Defence Force; or

(b) because the member was for the time being physically or mentally incapable of performing his or her duties;

the member may, with the approval of CSC, before the expiration of the period of leave without pay, elect to pay contributions, calculated as if the member were on full pay, in respect of so much of the period as is specified in the election.

(2A) If a member is granted, on compassionate grounds, leave without pay for a period exceeding 21 days, the member may, with the approval of CSC, before the end of the period of leave without pay, elect to pay contributions, calculated as if the member were on full pay, in respect of so much of the period, not exceeding 2 years, as is specified in the election.

(3) Where:

(a) leave without pay is granted to a member (in this subrule called the inactive member) whose spouse (in this subrule called the active member):

(i) is also a member; or

(ii) is an eligible member of the Defence Force within the meaning of the 1973 Act; and

(b) the active member is posted to a locality to which the inactive member is unable to obtain a posting; and

(c) the inactive member is granted the leave without pay in order not to be separated from the active member;

the inactive member may elect to pay contributions, calculated as if the member were on full pay, in respect of so much of that period, not exceeding 2 years, as is specified in the election.

(3A) An election under subrule (3) must be made before the expiration of the period specified in the election.

General conditions applicable to contributions under rules 6 and 7

(1) The provisions of rule 4 apply to an election made under rule 6 or 7 as if:

(a) the reference in that rule to the amount of salary paid to the member in a fortnight were a reference to the amount of salary that would have been paid to the member in that fortnight if the member had been on full pay; and

(b) the salary so assumed to be paid did not include an allowance unless:

(i) the allowance was payable to the member on the day immediately before the commencement of the period; and

(ii) an appropriate authority of the Defence Force has notified CSC that, but for the member’s absence on leave without pay, the allowance would have been payable to the member in respect of the whole of the period of his or her absence on that leave.

(2) A member who has made an election under rule 6 or 7 may revoke the election at any time after the expiration of a period of 3 months after the election was made.

(3) A revocation under subrule (2) has effect in relation to the first salary fortnight in relation to which it can be applied in the ordinary course of business.

Member contributions to be paid to CSC

Contributions payable by a member are to be paid to CSC by or on behalf of the member.

Liability of Department to pay employer contributions

(1) The Department must, on each salary pay‑day on which a member pays contributions, pay to CSC an employer contribution in relation to the member.

(1AA) To avoid doubt, the Department’s obligation to pay an employer contribution in relation to a member continues even if:

(a) the member has not provided his or her tax file number to CSC; or

(b) CSC returns a contribution of the member under rule 11QA.

(1A) Subrule (1) does not apply in relation to a contribution made under Part 14.

(2) In spite of a member paying contributions during a period of leave without pay to which rule 7 applies, subrule (1) does not apply:

(a) in the case of any part of a period of leave without pay referred to in subparagraph 7 (2) (a) (i) in respect of which no amount is paid under a prescribed arrangement; or

(aa) in the case of a period of leave without pay referred to in subparagraph 7 (2) (a) (ii), (iii) or (iv) or paragraph 7 (2) (b) that exceeds 12 months — to any part of the excess period; or

(ab) in the case of a period of leave without pay referred to in subrule 7 (2A); or

(b) in the case of a period of leave without pay referred to in subrule 7 (3).

(3) The amount of an employer contribution payable by the Department in relation to a member is an amount that is 3 per centum of the amount of the salary payable to the member in respect of the relevant fortnight.

(4) In this rule:

member’s employer, in relation to a member who is engaged in employment referred to in subparagraph 7 (2) (a) (i), means the person who is the employer of the member in respect of that employment.

prescribed arrangement, in relation to a member who is engaged in employment referred to in subparagraph 7 (2) (a) (i), means an arrangement between the Commonwealth and the member’s employer under which the employer agrees to pay to the Commonwealth, in relation to a member, a contribution:

(a) in respect of each salary fortnight:

(i) in the period of that employment; or

(ii) in a specified part of that period;

as the case may be, in respect of which the member pays a contribution under this Part; and

(b) of an amount equivalent to the amount that would be payable by the Commonwealth, as employer, in respect of the period referred to in subparagraph (a) (i) or (a) (ii), as the case may be, if the Scheme were fully funded within the meaning of that expression in Division 9.5 of the SIS Regulations.

Payment of contributions into Fund

CSC must pay all member and employer contributions received by it into the Fund.

Part 2B Administration of unitised Fund

Division 1 Arrangements for Investment Divisions

11C Investment Divisions — general

(1) CSC may establish an Investment Division of the Fund at any time.

(2) CSC may, at any time:

(a) refuse to issue further units for an Investment Division; or

(b) wind up an Investment Division; or

(c) merge 2 or more Investment Divisions; or

(d) divide an Investment Division into 2 or more Investment Divisions.

(3) CSC:

(a) must name each Investment Division that it establishes (including an Investment Division established after a merger or division); and

(b) may change the name of an Investment Division.

(4) There must be at least one Investment Division in existence at all times.

11D Default Investment Division

(1) If the Fund has a single Investment Division in existence, that Division is the default Investment Division.

(2) If the Fund has more than one Investment Division, CSC must designate one of them as the default Investment Division.

(3) CSC may, at a later time, designate another Investment Division as the default Investment Division.

11E Winding up of Investment Division

(1) This rule applies if CSC decides to wind up an Investment Division.

(2) Before winding up the Investment Division, CSC must:

(a) decide on the how units in the Investment Division held in accounts of a unitised member will be transferred to other Investment Divisions in the absence of a transfer application from the member; and

(b) give each unitised member notice under rule 11ZB; and

(c) if no transfer application is received by the member before the Investment Division is wound up, transfer the units in accordance with the decision under paragraph (a).

(3) CSC must:

(a) sell the assets of the Investment Division, make the necessary deductions from the proceeds of the sale to pay the debts of the Investment Division and transfer the remainder of the proceeds to another Investment Division; or

(b) reallocate the assets of the Investment Division to another Investment Division in accordance with Division 4.

11F Net asset value

(1) The net asset value of an Investment Division is the amount determined by CSC to be the total value of the assets of the Investment Division, less any amount representing liabilities of the Investment Division.

(2) CSC may include in the assessment of net asset value an amount representing CSC’s assessment of:

(a) actual or anticipated income tax liability; or

(b) an actual or anticipated benefit.

(3) CSC may determine a net asset value from time to time, including more than once on a particular day.

(4) CSC may require an asset of an Investment Division to be valued at any time, including more than once on a particular day.

Division 2 Unitisation procedure

11G Unitisation of an Investment Division

(1) CSC must determine the net asset value of an Investment Division that is established.

(2) CSC may determine, from time to time, the method of determining the net asset value of a Fund Investment Division.

(3) CSC must:

(a) divide the beneficial interest in the assets of an Investment Division into a number of units in the Division; and

(b) work out, for each day, the price of the units in accordance with rules 11J and 11K.

(4) A unit does not confer an interest in any particular part of:

(a) the beneficial interest in the net assets of the Investment Division; or

(b) the assets of the Investment Division; or

(c) the Investment Division.

(5) Subject to the terms on which the units are issued to a unitised member, each unit in a class of units of an Investment Division is of equal rank within the class.

(6) CSC must make and keep unit records for each Investment Division, including:

(a) the name and contact details of each unitised member who has a unit in the Investment Division; and

(b) the number of units in the Investment Division held by each unitised member; and

(c) the aggregate value of those units.

11H Classes of units

(1) CSC may divide the units in an Investment Division into 2 or more classes.

(2) The unit value of units in one class may be different from the unit value of units in another class.

11I Unit value

(1) Subject to these Rules, the unit value of a unit in a class of units held in an Investment Division in relation to member funded accounts and employer funded accounts for a particular day (the valuation day) that is a working day is the amount worked out using the formula:

where:

net asset value for the class means the net asset value of the Investment Division attributed to the class as at the end of the valuation day.

total number of units in the class means the total number of units in the class held in relation to member funded accounts and employer funded accounts.

(2) However, if the valuation day is not a working day, the unit value of the unit is the unit value for the last working day before the valuation day unless CSC calculates the net asset value for the valuation day.

(3) The unit value of a unit in the class of units held in the Investment Division in relation to a member unfunded account for a particular day is the same as the unit value for a unit mentioned in subrule (1) for that day.

(4) In this rule:

working day means a day on which the Australian Stock Exchange is open for business.

11J Issue price

(1) Subject to subrule (2), the issue price of a unit for a particular day is the amount worked out using the formula:

where:

unit value means the unit value for the day.

estimate of acquisition costs means CSC’s estimate of the costs associated with the acquisition of the assets underlying the unit that will be incurred by CSC on that day.

(2) CSC may, if it is satisfied that it is reasonable in the circumstances, set the issue price of a unit for a transaction as the unit value for the day.

11K Withdrawal price

(1) Subject to subrule (2), the withdrawal price of a unit for a particular day is the amount worked out using the formula:

where:

unit value means the unit value of the unit for the day.

estimate of disposal costs means CSC’s estimate of the costs associated with the disposal of the assets underlying the unit that will be incurred by CSC on that day.

(2) CSC may, if it is satisfied that it is reasonable in the circumstances, set the withdrawal price of a unit for a transaction as the unit value for the day.

11L Division or consolidation of units

(1) CSC may decide to divide or consolidate the units in an Investment Division.

(2) If CSC decides to divide or consolidate units, CSC must:

(a) give each unitised member with units in the Investment Division notice of the division or consolidation; and

(b) ensure that the member’s member funded account, member unfunded account and employer funded account are amended as appropriate to reflect the consolidation or division.

Division 3 Arrangements for unitised members

11M Establishment and operation of unitised accounts

(1) CSC must establish and maintain the following accounts for each person who becomes a unitised member:

(a) a member funded account;

(b) an employer funded account.

(2) CSC must also establish and maintain a member unfunded account for each of those persons who is a transferred person on 1 July 2002.

(3) An account established under subrule (1) or (2) is an account of units in Investment Divisions of the Fund that are held for the member.

(4) CSC must credit a unitised member’s member funded account with units representing the contributions made by the member after 30 June 2002, allocated to Investment Divisions in accordance with any current investment nomination by the member.

(5) CSC must credit a unitised member’s employer funded account with units representing the contributions made by the Department after 30 June 2002, allocated to Investment Divisions in accordance with rule 11P.

(6) CSC may debit a unitised member’s member funded account or employer funded account to pay amounts owed to CSC or the Commissioner of Taxation.

11N Annual statement

As soon as practicable after the end of a financial year, CSC must give to each unitised member, to each ancillary and to each associate a statement of the beneficial interest that the member, ancillary or associate holds in the Fund, including:

(a) the number of units held in each Investment Division as at the date on which the statement was issued; and

(b) the aggregate value of those units as at that date.

Division 4 Allocation of contributions to Investment Divisions

11O How contributions are allocated to an Investment Division

For these Rules, a reference to the allocation of contributions to an Investment Division is a reference to the issue of units in the Investment Division to the value of the contribution at the issue price of the Investment Division on the day of issue.

11P Allocation of employer contributions

(1) CSC must allocate contributions made by the Department to a unitised member’s employer funded account to the default Investment Division.

(2) Subject to rule 11R, a contribution to be allocated in accordance with this rule must be allocated as at the day that the contribution is received.

11Q Allocation of member contributions

(1) If the Fund has, or will have, more than one Investment Division, a unitised member may nominate to CSC the Investment Division or Investment Divisions to which contributions by the member should be allocated, from the day specified in the nomination.

Note An investment nomination received under expired subrule 112 (3) and in force immediately before Part 15 expired continues in force as if the nomination had been made under this subrule.

(3) Subject to rule 11QA, CSC must, as far as possible, comply with a unitised member’s investment nomination.

(4) A unitised member may change an investment nomination at any time.

(5) If CSC:

(a) has not received an investment nomination from a unitised member; or

(b) cannot comply with an investment nomination in relation to all or part of a member’s contribution because the nomination is defective, or because one or more of the Investment Divisions have changed;

CSC must allocate the member’s contributions, or the part of the member’s contributions, to the default Investment Division.

(6) Subject to rule 11R, a contribution to be allocated to an Investment Division in accordance with this rule must be allocated to the Investment Division as at the day that the contribution is received.

11QA Treatment of contributions where no tax file number has been provided

(1) Subject to subrule (2), if CSC receives a contribution from, or on behalf of, a member in a manner that is inconsistent with subregulation 7.04 (2) of the Superannuation Industry (Supervision) Regulations 1994, CSC:

(a) must allocate the contribution to the Investment Division or Investment Divisions nominated by the member; but

(b) must not allocate the contribution to the member’s account.

(2) If, within 30 days after CSC receives the contribution, the member’s tax file number is provided to CSC, CSC must allocate the contribution to the member’s account with effect from the day the tax file number is provided to CSC.

(3) If, at the end of 30 days after CSC receives the contribution, the member’s tax file number has not been provided to CSC, CSC must return the contribution to the member or, if the contribution was paid to CSC by another person on behalf of the member, to that person for the benefit of the member.

11R Suspension of allocations

(1) CSC may suspend the allocation to an Investment Division of contributions made to the Fund for a period if, during the period:

(a) because of an event that is beyond the control of CSC, CSC is unable to calculate the unit value for the Investment Division; or

(b) CSC is satisfied on reasonable grounds that it is in the interests of members to suspend the allocation.

(2) If CSC suspends the allocation of contributions for a period under subrule (1), CSC must allocate the contributions on the first day after the period ends.

Division 5 Transferring units from one Investment Division to another

11S How units are transferred from one Investment Division to another

For these Rules, a reference to a transfer of units from one Investment Division to a second Investment Division on a day is a reference to:

(a) the withdrawal of the units from the first Investment Division, at the withdrawal price for the Investment Division on the day; and

(b) the issue of units to the same value from the second Investment Division, at the issue price for the second Investment Division on the day.

11T Transfer of units in employer accounts on change of default Investment Division

If there is a change in the default Investment Division, CSC must transfer the units in each member’s employer funded account from the default Investment Division before the change to the default Investment Division after the change.

11U Unitised member may apply for transfer of units

(1) A unitised member may apply to CSC to transfer some or all of the units in the member’s member funded account or member unfunded account to another Investment Division or Investment Divisions (in this Division called the new Investment Division).

(2) For these Rules, the application is a transfer application.

11V Transfer applications — day of transfer

(1) This rule applies if a unitised member makes a transfer application.

(2) If CSC approves a transfer application, CSC must effect the transfer on:

(a) if the application is complete — the day on which CSC receives the application, or a later day specified in the application; and

(b) if the application is incomplete — the day on which CSC receives the information from the member that is necessary to make the application complete, or a later day specified in the application.

11W Limits applicable to transfers

(1) CSC may limit the number of times a unitised member may make transfer applications.

(2) CSC may determine a minimum withdrawal amount and a minimum investment amount for a transfer application.

11X Grounds for refusing transfer application

CSC may refuse to approve a transfer application if:

(a) the aggregate value of the units that would otherwise be issued in the new Investment Division in accordance with rule 11V is less than the minimum investment amount; or

(b) the aggregate value of the units that would otherwise be withdrawn from the old Investment Division in accordance with that rule is less than the minimum withdrawal amount.

11Y Suspension of transfers

(1) CSC may suspend transfers of units from one Investment Division to a second Investment Division for a period if, during the period:

(a) because of an event that is beyond the control of CSC, CSC is unable to calculate the unit value for either Investment Division; or

(b) CSC is satisfied on reasonable grounds that it is in the interests of members to suspend the withdrawal of units of the first Investment Division or the issue of units of the second Investment Division.

(2) If CSC suspends the transfer of units for a period under subrule (1), CSC must effect any approved transfers on the first day after the period ends.

(3) A transfer application may be withdrawn during the suspension period.

11Z Fees for transfers

(1) CSC may charge a fee for transferring a unitised member’s beneficial interest under this Division.

(2) CSC must not approve a transfer application unless CSC is satisfied that:

(a) the member is aware that a fee may be charged for the transfer; and

(b) the member has agreed to pay the fee.

11ZA Closed or wound up Investment Division

(1) CSC may refuse to approve a transfer application if, before the application is processed, CSC decides:

(a) to merge an Investment Division nominated by the member with another Investment Division; or

(b) to refuse to issue further units for the Investment Division; or

(c) to wind up the Investment Division.

(2) If CSC refuses to approve the transfer application, CSC must ask the member to nominate another Investment Division, or Investment Divisions, to which his or her beneficial interest may be allocated.

(3) CSC may temporarily transfer the units to an Investment Division determined by CSC until CSC is able to transfer the units to an Investment Division nominated by the member.

Division 6 Notice of proposed changes to Investment Divisions

11ZB Members to be informed about proposed changes to Investment Divisions

(1) If it is proposed to make a change to the Investment Divisions of the Fund under subrule 11C (2) or rule 11E or 11L, CSC must, not less than one month before the day of the proposed change, give each unitised member a notice that includes:

(a) general information; and

(b) information about the proposed change; and

(c) information about the effect of the change on the unitised member.

(2) The general information for paragraph (1) (a) is information about:

(a) the unitisation of the Fund and Investment Divisions; and

(b) the range of investment options available to unitised members; and

(c) the terms on which investments may be made; and

(d) the operation of the default Investment Division; and

(e) how to make an investment nomination under this Division; and

(f) how to make a transfer application; and

(g) the operation of Division 5.

(3) The information about the proposed changes for paragraph (1) (b) is information about:

(a) the Investment Divisions and their investment strategies before and after the change; and

(b) when the change will be made; and

(c) how the change will operate by dividing, merging, creating or winding up Investment Divisions, or closing Investment Divisions to further contributions; and

(d) if the change includes a change in the default Investment Division, how that will affect unitised members.

(4) The information about the effect of the change on the unitised member for paragraph (1) (c) is information about:

(a) any units held in an account of the member that are affected by the change; and

(b) how the units will be dealt with by CSC after the change if CSC does not receive a transfer application in relation to them; and

(c) any current investment nomination by the member that is affected by the change; and

(d) how CSC will allocate contributions of the member if CSC does not receive a new investment nomination.

Division 7 Withdrawal of beneficial interest

11ZC Payment of benefits

(1) This rule applies if a person requests CSC to withdraw some or all of the units that are held in an Investment Division, or Investment Divisions, for the benefit of the person to make a payment of a benefit that is payable under these Rules in relation to the person.

(2) The withdrawal price of the units is:

(a) if the request is received by CSC after the day on which the person ceases to be a member — the withdrawal price of the units for the day when CSC receives the application; and

(b) if the request is received by CSC before the end of the day on which the person ceases to be a member — the withdrawal price of the units for the day after the person ceases to be a member.

(3) However, CSC may:

(a) refuse the request if it would be contrary to a law of the Commonwealth, a State or a Territory to act in accordance with the request; or

(b) suspend the withdrawal of units in accordance with rule 11ZD.

11ZD Suspension of withdrawals

(1) CSC may suspend withdrawals of units for rule 11Y that include withdrawals from a particular Investment Division for a period if, during the period:

(a) because of an event that is beyond the control of CSC, CSC is unable to calculate the unit value for the Investment Division; or

(b) CSC is satisfied on reasonable grounds that it is in the interests of members to suspend the withdrawal of units from the Investment Division.

(2) If CSC suspends the withdrawal of units for a period under subrule (1), CSC must effect the withdrawals on the first day after the period ends.

Part 3 Members’ benefits

Note The amount of a member’s benefits may have been affected by a family law superannuation payment split under Part 13.

Division 1 Benefits other than Invalidity Benefits

Benefits on retirement before reaching 55 years of age or earlier retiring age, otherwise than for redundancy or retrenchment etc

(1) This rule applies to a member who retires:

(a) in the case of a member whose retiring age is less than 55 years — before reaching his or her retiring age; or

(b) in any other case — before reaching the age of 55 years;

not being a member who is:

(c) retired on the ground of redundancy or retrenchment; or

(d) entitled to an invalidity pension.

(2) Subject to Part 10, in the case of a person to whom this rule applies:

(a) his or her member benefit is payable to him or her as a lump sum, in accordance with Part 11; and

(b) there is applicable to him or her a preserved benefit of the amount of his or her employer benefit.

(3) A person who is entitled to be paid a member benefit under paragraph (2) (a) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the member benefit and if he or she so elects:

(a) the member benefit is not payable to him or her as a lump sum; and

(b) there is applicable to him or her a preserved benefit of that amount.

(4) If a person who is entitled to be paid a member benefit under paragraph 2 (a):

(a) does not request that the benefit be paid to him or her as a lump sum; and

(b) does not make an election under subrule (3);

within the period of 3 months after becoming entitled to the benefit, there is applicable to him or her a preserved benefit of the amount of that benefit.

Benefits on retirement for redundancy or retrenchment or on completion of limited tenure appointment or on attaining retiring age of less than 55 years

(1) Where a member is retired on the ground of redundancy or retrenchment or on completion of a limited tenure appointment and he or she is not entitled to an invalidity pension:

(a) subject to Part 10, his or her member benefit is payable to him or her as a lump sum, in accordance with Part 11; and

(b) there is applicable to him or her a preserved benefit of the amount of his or her employer benefit.

(2) Where a member retires and, on that retirement:

(a) he or she has reached his or her retiring age; and

(b) that retiring age is less than 55 years; and

(c) he or she is not entitled to an invalidity pension;

then:

(d) subject to Part 10, his or her member benefit is payable to him or her as a lump sum, in accordance with Part 11; and

(e) there is applicable to him or her a preserved benefit of the amount of his or her employer benefit.

(3) A person who is entitled to be paid a member benefit under paragraph (1) (a) or (2) (d) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the member benefit and if he or she so elects:

(a) the member benefit is not payable to him or her as a lump sum; and

(b) there is applicable to him or her a preserved benefit of that amount.

(4) A person to whom a preserved benefit is applicable under paragraph (1) (b) or (2) (e) may elect that, instead of that benefit being so preserved, it be converted into a pension payable to him or her and if he or she so elects:

(a) a preserved benefit of the amount of the benefit is not applicable to him or her; and

(b) subject to Part 10, the benefit is converted into a pension payable to him or her.

(5) Where:

(a) a member retired and, on that retirement, subrule (2) applied to him or her; and

(b) he or she again became a member and again retires; and

(c) on the last‑mentioned retirement the member is not entitled to an invalidity pension;

then, for the purposes of these Rules, the person is taken to be a person to whom subrule (2) applies.

(6) If a person who is entitled to be paid a member benefit under paragraph 1 (a) or 2 (d):

(a) does not request that the benefit be paid to him or her as a lump sum; and

(b) does not make an election under subrule (3);

within the period of 3 months after becoming entitled to the benefit, there is applicable to him or her a preserved benefit of the amount of that benefit.

Benefits on retirement on or after attaining age of 55 years

(1) If a member:

(a) retires on or after turning 55; and

(b) is not entitled to an invalidity pension;

the following benefits are payable to him or her as a lump sum, in accordance with Part 11:

(c) subject to Part 10, his or her member benefit; and

(d) subject to Part 10, his or her employer benefit.

(2) A person who is entitled to be paid a member benefit under subrule (1) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the member benefit and if he or she so elects:

(a) the member benefit is not payable to him or her as a lump sum; and

(b) there is applicable to him or her a preserved benefit of that amount.

(3) If a person is entitled to be paid an employer benefit under subrule (1):

(a) the person may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the employer benefit and, if he or she so elects:

(i) the employer benefit is not payable to him or her as a lump sum; and

(ii) there is applicable to him or her a preserved benefit of that amount; or

(b) the person may elect that, instead of his or her employer benefit being paid to him or her, it be converted into a pension payable to him or her and, subject to Part 10, if he or she so elects, that benefit is so converted; or

(c) the person may elect that, instead of his or her employer benefit being paid in full to him or her, a specified part of that benefit, being not less than one‑half of the benefit, be converted into a pension payable to him or her and, subject to Part 10, if he or she so elects:

(i) that part of the employer benefit is so converted; and

(ii) the balance of the employer benefit is payable to him or her as a lump sum.

(4) Paragraphs (3) (b) and (c) do not apply to a person whose employer benefit is less than the amount prescribed in rule 65B.

(5) If a person who is entitled to be paid a member benefit under subrule (1):

(a) does not request that the benefit be paid to him or her as a lump sum; and

(b) does not make an election under subrule (2);

within the period of 3 months after becoming entitled to the benefit, there is applicable to him or her a preserved benefit of the amount of that benefit.

Division 2 Invalidity Benefits

Subdivision A Incapacity Classification

Incapacity Classification Committee

An Incapacity Classification Committee established under paragraph 3 (2) (g) of the Trust Deed is constituted under, has the functions set out in, and must operate in accordance with, this Division.

Membership of Committee

(1) The Committee comprises such number of persons as CSC determines.

(2) The qualifications or other requirement, which are or is a prerequisite to the appointment of each member of the Committee, are such as CSC determines.

(3) If a member of the Committee ceases to hold the relevant qualifications or to comply with the relevant requirement, applicable under subrule (2), his or her membership of the Committee is thereupon taken to be terminated.

Functions of Committee

(1) The functions of the Committee are to exercise, at the request of CSC and subject to any directions given by CSC, the powers and functions under rules 22, 22A, 23, 32, 33 and 34.

(2) When determining the classification of, or reclassifying, an invalidity retiree, the Committee:

(a) must take into account any evidence relating to that retiree that is made available or submitted to it; and

(b) may take steps to obtain any other evidence that it considers necessary to properly determine the classification.

(3) CSC must make available to the Committee any medical or other evidence that it has concerning the invalidity retiree whose classification or reclassification is being considered and that is relevant to his or her classification.

Proceedings of Committee

Subject to any directions given by CSC, the Committee may regulate its proceedings as the Committee thinks fit.

Decisions by Committee

The Committee must notify CSC of its decision as to the classification or reclassification of an invalidity retiree, giving reasons for its decision.

Classification in respect of incapacity

(1) Subject to rule 22A, where a member is, or is about to be, retired on the ground of invalidity, CSC or the Committee must determine the percentage of incapacity in relation to civil employment of the invalidity retiree and must classify the retiree according to the percentage of incapacity as follows.

Percentage of incapacity

Class

60% or more A

30% or more but less than 60% B

Less than 30% C

(2) In determining, for the purposes of subrule (1), the percentage of incapacity in relation to civil employment of an invalidity retiree, CSC or the Committee must have regard to the following matters only:

(a) the vocational, trade and professional skills, qualifications and experience of the retiree;

(b) the kinds of civil employment which a person with the skills, qualifications and experience referred to in paragraph (a) might reasonably undertake;

(c) the degree to which the physical or mental impairment of the retiree that is the cause of the invalidity by reason of which he or she has been, or is to be, retired has diminished his or her capacity to undertake the kinds of civil employment referred to in paragraph (b).

(3) The death of a person after he or she has been retired on the ground of invalidity does not prevent the classifying of the person under subrule (1).

(4) This rule does not apply to a person who, by reason of rule 32, 33 or 34, is not entitled to invalidity benefits.

22A Interim classification

(1) Where a member is, or is about to be, retired on the ground of invalidity and CSC or the Committee:

(a) is satisfied that the percentage of incapacity in relation to civil employment of the invalidity retiree is not less than 30%; and

(b) requires further information in order to determine whether the person is to be classified as Class A or Class B;

CSC or the Committee may make an interim classification of the person as Class B.

(2) Where an invalidity retiree has an interim classification, CSC or the Committee must review the classification not later than 3 months after the classification was made or the classification was last reviewed, whichever is the later.

(3) When CSC or the Committee is satisfied that it has received sufficient information to enable it to classify under rule 22 an invalidity retiree who has an interim classification, it must cancel the interim classification and classify the person under that rule.

(4) This rule does not apply to a person who, by reason of rule 32, 33 or 34, is not entitled to invalidity benefits.

Reclassification in respect of incapacity

(1) Where CSC or the Committee, at any time, is satisfied that there has been such a change in the percentage of incapacity in relation to civil employment of an invalidity pensioner that his or her classification should be altered, CSC or the Committee may reclassify him or her in the appropriate classification set out in rule 22 according to the percentage of his or her incapacity in relation to civil employment.

(2) Where an invalidity pensioner has attained the age of 55 years and the invalidity pensioner is classified:

(a) as Class A — subrule (1) does not apply to him or her; or

(b) as Class B — subrule (1) is taken not to empower CSC to reclassify him or her as Class C.

(3) In determining, for the purposes of subrule (1), the percentage of incapacity in relation to civil employment of an invalidity pensioner, CSC or the Committee must have regard to the following matters only:

(a) the vocational, trade and professional skills, qualifications and experience of the pensioner;

(b) the kinds of civil employment which a person with skills, qualifications and experience referred to in paragraph (a) might reasonably undertake;

(c) the degree to which any physical or mental impairment of the pensioner, being a prescribed physical or mental impairment, has diminished his or her capacity to undertake the kinds of civil employment referred to in paragraph (b).

(4) Where CSC or the Committee reclassifies a person under this rule, CSC or the Committee must specify the date from which the reclassification has effect and, on and after that date, the person is, for the purposes of these Rules, taken to be classified under rule 22 accordingly.

(5) Where CSC or the Committee reclassifies a person under this rule, the date specified by CSC or the Committee as the date from which the reclassification has effect is not to be a date earlier than the date on which CSC or the Committee reclassifies the member unless:

(a) the person is reclassified as Class A or, having been classified as Class C, is reclassified as Class B; and

(b) CSC or the Committee is satisfied that special circumstances exist that justify an earlier date being so specified.

(6) Where a person who was retired otherwise than on the ground of invalidity is, by virtue of rule 30, treated as if he or she had been retired on the ground of invalidity, CSC or the Committee may, despite subrule (5), on the same day on which it classifies him or her under rule 22, reclassify him or her under this rule with effect from a date after the date of his or her retirement but before the date on which CSC or the Committee makes the reclassification.

(7) The death of a person after he or she has been classified under rule 22 or reclassified under this rule does not prevent the reclassifying of the person under subrule (1).

(8) For the purposes of this rule, a person who:

(a) is classified as Class C; and

(b) immediately before being so classified was an invalidity pensioner other than an invalidity pensioner who had an interim classification made under rule 22A;

is taken to be an invalidity pensioner.

(8A) This rule does not apply to a person who:

(a) is classified as Class C; and

(b) immediately before being so classified was an invalidity pensioner;

and who either:

(c) has, under paragraph 51 (1) (c), (d), (e) or (f), been paid the whole of the employer benefit included in his or her preserved benefit; or

(d) has attained the age of 55 years and:

(i) has been paid the employer benefit included in his or her preserved benefit; or

(ii) has elected to have all or part of that employer benefit converted into a pension and has been paid the balance (if any) of the employer benefit.

(9) This rule does not apply to a person who has attained the age of 65 years.

(10) In this rule:

prescribed physical or mental impairment, in relation to an invalidity pensioner or a deceased person who was, immediately before his or her death, an invalidity pensioner, means:

(a) a physical or mental impairment of the pensioner that was the cause, or one of the causes, of the invalidity by reason of which he or she was retired, whether or not that impairment changed, for better or worse, after that retirement; or

(b) any other physical or mental impairment of the pensioner causally connected with a physical or mental impairment referred to in paragraph (a).

Decision as to classification or reclassification to be notified to invalidity retiree

CSC must notify an invalidity retiree in writing of any decision under rule 22, 22A or 23 as to the classification or reclassification of the retiree and the reasons for that decision.

Power of CSC to require persons to be medically examined etc

(1) CSC may, by notice in writing given to a person in receipt of an invalidity pension, require him or her:

(a) to submit himself or herself for medical examination by a legally qualified medical practitioner at a time and place specified in the notice; or

(b) to furnish in writing to CSC, within such period as is specified in the notice, such information as is required by the notice with respect to any employment (whether as an employee or on his or her own account) in which he or she has been engaged during such period as is specified in the notice.

(2) A notice under subrule (1) must set out the effect of subrule (3).

(3) Where a person fails to comply with a notice given under subrule (1) and CSC is not satisfied that there was a reasonable excuse for the failure, CSC may, by notice in writing given to the person, suspend the person’s invalidity pension with effect from a day determined by CSC, being a day not earlier than:

(a) in a case where the first‑mentioned notice required the person to submit to a medical examination on a day specified in the notice — the day next following that day; or

(b) in a case where the first‑mentioned notice required the person to furnish information within a period specified in the notice — the day next following the end of that period.

(4) A notice to a person under subrule (3) must set out the effect of subrules (7), (9) and (10).

(5) An invalidity pension is not payable in respect of a period during which a suspension under subrule (3) is in force.

(6) Where:

(a) the invalidity pension of a person is suspended under subrule (3); and

(b) CSC, having regard to such matters as it considers relevant, is of the opinion that the suspension should be revoked;

CSC may, by notice in writing given to the person, revoke the suspension with effect from a day determined by CSC, being a day not later than the day on which the notice is given.

(7) Without limiting subrule (6), where the invalidity pension of a person is suspended under subrule (3), the person may, by notice in writing given to CSC, request CSC to revoke the suspension and, where such a request is made, CSC must, by notice in writing given to the person:

(a) if the invalidity pension has been suspended by virtue of the relevant person’s having failed to comply with a notice requiring the person to submit to a medical examination — require the person to submit to a medical examination by a medical practitioner at a time and place specified in the second‑mentioned notice; or

(b) if the invalidity pension has been suspended by virtue of the person’s having failed to comply with a notice requiring the person to give information to CSC (in this paragraph called the original notice) — require the person to give in writing to CSC, within such period as is specified in the second‑mentioned notice, such information as was required by the original notice to be given.

(8) A notice given by CSC under subrule (7) must set out the effect of subrules (9) and (10).

(9) Where:

(a) because of a request having been made to revoke the suspension of the invalidity pension of a person, a notice under subrule (7) is given to the person; and

(b) either:

(i) the person complies with the notice; or

(ii) the person fails to comply with the notice but CSC is satisfied that there was a reasonable excuse for the failure;

CSC must, by notice in writing given to the person, revoke the suspension with effect from a day determined by CSC, being a day not later than:

(c) in a case to which subparagraph (b) (i) applies — the day on which the person so complied with the notice; or

(d) in a case to which subparagraph (b) (ii) applies:

(i) the day on which CSC became so satisfied; or

(ii) if CSC is satisfied that it would be equitable in the circumstances of the case for the revocation to have effect from an earlier day — from that earlier day.

(10) Where:

(a) because of a request having been made to revoke the suspension of the invalidity pension of a person, a notice under subrule (7) is given to the person; and

(b) the person fails to comply with the notice and CSC is not satisfied that there was a reasonable excuse for the failure;

CSC must, by notice in writing given to the person, refuse to revoke the suspension.

(11) A notice required or permitted to be given:

(a) to a person by CSC under subrule (6), (7), (9) or (10) may be given to a person acting on his or her behalf; or

(b) to CSC by a person under this rule may be given by a person acting on his or her behalf.

(12) Where CSC is required by this rule to give a person a notice, the notice is taken to have been given to the person if:

(a) the notice is served on the person personally; or

(b) the notice is sent to the person by pre‑paid post as a letter and the person acknowledges receipt of the letter; or

(c) where CSC has caused all reasonable steps to be taken to ascertain a reliable address of the person, the notice is sent to the person by pre‑paid post to:

(i) in a case where CSC is satisfied that at least one reliable address of the person has been ascertained — that address or one of those addresses; or

(ii) in any other case — the last address of the person known to CSC.

(13) A reference in subrule (12) to a reliable address of a person is a reference to an address where, if a letter were sent to the person by pre‑paid post to the address, the person would probably receive the letter.

Subdivision B Invalidity Benefits

Entitlement to invalidity benefits

A person who is classified as Class A or Class B under rule 22 (whether on his or her retirement or by reason of his or her having been reclassified under rule 23) or has an interim classification made under rule 22A is entitled to invalidity benefits in accordance with this Division.

26A Splitting of invalidity benefits after reclassification

Invalidity benefits that are payable under this Subdivision after a reclassification under rule 23 are subject to adjustment where there is a family law superannuation payment split under Part 13.

Invalidity benefits for person classified as Class A

(1) Where a person who is entitled to invalidity benefits is classified as Class A:

(a) subject to Part 10, his or her member benefit is payable to him or her as a lump sum, in accordance with Part 11; and

(b) subject to Part 10, his or her employer benefit is converted into a pension payable to him or her.

(2) A person who is entitled to be paid a member benefit under subrule (1) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the benefit and if he or she so elects:

(a) the member benefit is not payable to him or her as a lump sum; and

(b) there is applicable to him or her a preserved benefit of that amount.

(3)If a person who is entitled to be paid a member benefit under subrule (1):

(a) does not request that the benefit be paid to him or her as a lump sum; and

(b) does not make an election under subrule (2);

within the period of 3 months after becoming entitled to the benefit, there is applicable to him or her a preserved benefit of the amount of that benefit.

Invalidity benefits for person classified as Class B

(1) Where a person who is entitled to invalidity benefits is classified as Class B:

(a) subject to Part 10, his or her member benefit is payable to him or her as a lump sum, in accordance with Part 11; and

(b) subject to Part 10, a pension is payable to him or her at an annual rate equal to:

(i) half the rate of the pension which would have been payable to him or her if he or she had been classified as Class A; or

(ii) the rate of the pension which would have been payable to him or her if he or she:

(A) had been retired otherwise than on the ground of invalidity; and

(B) were entitled to elect to convert his or her employer benefit into a pension and had elected to do so;

whichever is the greater.

(2) A person who is entitled to be paid a member benefit under subrule (1) may elect that, instead of that benefit being paid to him or her, there be applicable to him or her a preserved benefit of the amount of the benefit and if he or she so elects:

(a) the member benefit is not payable to him or her as a lump sum; and

(b) there is applicable to him or her a preserved benefit of that amount.

(3)If a person who is entitled to be paid a member benefit under subrule (1):

(a) does not request that the benefit be paid to him or her as a lump sum; and

(b) does not make an election under subrule (2);

within the period of 3 months after becoming entitled to the benefit, there is applicable to him or her a preserved benefit of the amount of that benefit.

Effect of change of invalidity classification on pension and preserved benefit

(1) Where a person who is classified as Class A or Class B is reclassified as Class C:

(a) the pension payable to him or her under rule 27 or 28 is cancelled; and

(b) there is applicable to him or her a preserved benefit of the amount of his or her employer benefit.

(2) If a person referred to in subrule (1) is subsequently reclassified as Class A or Class B:

(a) the preserved benefit referred to in that subrule ceases to be applicable to him or her; and

(b) a pension is payable to him or her in accordance with rule 27 or 28, as the case may be, from the date specified under rule 23 by CSC or the Committee, as the case may be, as the date from which the classification has effect.

(3) Where a person referred to in subrule (2) was, while classified as Class C, paid, under paragraph 51 (1) (e) or (f), part of the employer benefit included in his or her preserved benefit, the rate of pension payable to the person in accordance with that subrule is reduced in such manner as CSC approves, having regard to the amount of employer benefit so paid to the person.

Person may be treated as having been retired on ground of invalidity

(1) Where a person has been retired otherwise than on the ground of invalidity but, after his or her retirement, CSC is satisfied that, at the time the person was retired, grounds existed on which he or she could have been retired on the ground of invalidity, CSC may, for the purposes of these Rules, treat the person as if he or she had been retired on the last‑mentioned ground.

(2) Where, because of action taken under subrule (1), a person is classified as Class A or Class B under rule 22 or has an interim classification made under rule 22A:

(a) so much of the preserved benefit applicable to him or her under rule 12, 13 or 14 as consists of employer benefit ceases to be applicable to him or her; and

(b) a pension is payable to him or her in accordance with rule 27 or 28, as the case may be.

(3) This rule does not apply to a person to whom a preserved employer benefit is not applicable.

Subdivision C Invalidity Benefits not Payable

Person classified as Class C

A person who is classified as Class C is not entitled to invalidity benefits under this Division.

Pre‑existing condition

(1) Where:

(a) a member is, or is about to be, retired on the ground of invalidity within a period of 2 years after becoming a member; and

(b) CSC or the Committee is satisfied that:

(i) the invalidity was caused, or was substantially contributed to, by a physical or mental condition that existed at the time when he or she became a member; and

(ii) the condition was not materially aggravated by his or her service after becoming a member;

the person is not entitled to invalidity benefits under this Division.

(2) Where:

(a) a person who has retired again becomes a member after a break in the continuity of his or her service; and

(b) he or she is not a person who again became a member pursuant to the Parliamentary Candidates Act; and

(c) he or she is subsequently retired on the ground of invalidity;

the person is, for the purposes of subrule (1), treated as if he or she had first become a member at the time when he or she again became a member.

Invalidity due to intentional act

(1) Where:

(a) a member is, or is about to be, retired on the ground of invalidity; and

(b) CSC or the Committee is satisfied that the invalidity was due to an intentional act on his or her part for the purpose of obtaining invalidity benefits under this Division;

he or she is not entitled to invalidity benefits under this Division.

(2) Subrule (1) does not apply in a case where CSC or the Committee is of the opinion:

(a) that the condition which formed the ground on which the person is, or is about to be, retired was not wholly due to the intentional act of the person; or

(b) that the action of the person was caused by his or her physical or mental condition.

Invalidity arising during absence without leave exceeding 21 days

(1) Where:

(a) a member is, or is about to be, retired on the ground of invalidity; and

(b) CSC or the Committee is satisfied that the invalidity was caused, or was substantially contributed to, by an occurrence that happened at a time when he or she was absent without leave and had been so absent for a period exceeding 21 consecutive days; and

(c) the salary of the member in respect of the period was forfeited under regulations made under the Defence Act 1903, and an amount equal to the amount of the salary so forfeited was not subsequently paid, and is not payable, under those regulations to him or her;

he or she is not entitled to invalidity benefits under this Division.

(2) This rule does not apply in a case where CSC or the Committee is satisfied that the absence of the member was due to sufficiently mitigating circumstances.

Division 3 Person rejoining the scheme

Suspension of pension of retirement pensioner other than invalidity retiree

Where a person who is in receipt of a pension under Division 1 or rule 52 again becomes a member, the pension is suspended for the duration of his or her membership and is not payable while it is suspended.

Cancellation of pension etc of invalidity retiree

Where a person, who was a member and was retired on the ground of invalidity, again becomes a member:

(a) any determination of his or her incapacity in relation to civil employment and consequent classification or reclassification, under rule 22 or 23, is cancelled; and

(b) if he or she was, immediately before again becoming a member, a person to whom an invalidity pension was payable, his or her entitlement to that pension is cancelled and there is applicable to him or her a preserved benefit of the amount of his or her employer benefit; and

(c) when the person again retires, he or she is not treated as having been retired on the ground of invalidity only by reason of his or her retirement on that ground from his or her earlier period of service.

Continuation of previous election to cease paying contributions

Where:

(a) immediately before a person ceased to be a member, the person was, in consequence of an election made by him or her under subrule 5 (2), not paying contributions; and

(b) the person again becomes a member;

that election is taken to be again in force in relation to the member as if it had been made after the member again became a member.

Part 4 Spouses’ and children’s benefits

Division 1 Death of a member

Applicability of benefits

Where a member dies and is survived by a spouse or spouses or an eligible child or children, benefits are payable in accordance with this Division.

Payment of deceased member’s member benefit

Subject to Part 10, a deceased member’s member benefit is payable as a lump sum as follows:

(a) if the deceased member is survived by a spouse or spouses, the benefit is payable to the spouse or spouses;

(b) if the deceased member is not survived by a spouse or spouses but is survived by an eligible child or children, the benefit is payable to, or for the benefit of, the child or children;

(c) if the deceased member is not survived by a spouse or spouses, or an eligible child, and he or she had notified CSC in writing that:

(i) he or she had a person or persons dependent on him or her who would not be eligible to receive benefits as a spouse or eligible child; and

(ii) he or she had made provision for that person or those persons in his or her will;

the benefit is payable to, or for the benefit of, the person or persons;

(d) in any other case the benefit is payable to the deceased member’s personal representative.

Payment of deceased member’s employer benefit

(1) Subject to Part 10, a deceased member’s employer benefit or a pension is payable as follows:

(a) if the deceased member is survived by a spouse with or without an eligible child or children, the employer benefit is payable to the spouse as a lump sum;

(b) if the deceased member is not survived by a spouse but is survived by an eligible child or children, a pension is payable to, or for the benefit of, the child or children at an annual rate equal to the relevant percentage in Table 2 in Schedule 4 of the deceased member’s notional invalidity pension;

(c) if the deceased member is not survived by a spouse or an eligible child and he or she had notified CSC in writing that:

(i) he or she had a person or persons dependent on him or her who would not be eligible to receive benefits as a spouse or eligible child; and

(ii) he or she had made provision for that person or those persons in his or her will;

the employer benefit is payable to, or for the benefit of, the person or persons as a lump sum;

(d) in any other case the employer benefit is payable to the deceased member’s personal representative as a lump sum.

(2) A spouse who is entitled to be paid an employer benefit under paragraph (1) (a) may elect that:

(a) instead of that employer benefit being paid to him or her, it be converted into a pension payable to him or her at an annual rate equal to the relevant percentage in Table 1 in Schedule 4 of the deceased member’s notional invalidity pension and if he or she so elects the benefit is so converted; or

(b) instead of that employer benefit being paid in full to him or her, a specified part of that benefit, being not less than one‑half of the benefit, be converted into a pension payable to him or her at an annual rate equal to the relevant percentage in Table 1 in Schedule 4 of the deceased member’s reduced notional invalidity pension and if he or she so elects:

(i) that part of the benefit is so converted; and

(ii) the balance of the benefit is payable to him or her as a lump sum.

(3) An employer benefits payable under subrule (1) is calculated as if, on the date of the death of the deceased member, he or she had become entitled to invalidity benefits under Division 2 of Part 3 and had been classified as Class A under rule 22.

(4) Subrule (3) does not apply where:

(a) a member dies and, at the time of his or her death, he or she was absent without leave and had been so absent for a period that exceeds 21 consecutive days; and

(b) the salary of the deceased member in respect of the period of absence without leave was forfeited under regulations made under the Defence Act 1903, and an amount equal to the amount of the salary forfeited was not subsequently paid, and is not payable, under those regulations to the deceased member’s personal representative;

2 Calculating increase in the notional employer benefit in any year

(1) A person’s notional employer benefit is taken to have increased in a financial year (in this item called the relevant year):

(a) if the all groups consumer price index number for the weighted average of the 8 capital cities published by the Statistician in respect of the March quarter of the year immediately preceding the relevant year exceeds the highest all groups consumer price index number for the weighted average of the 8 capital cities published by the Statistician in respect of the March quarter of any earlier year (except a year earlier than the year that commenced on 1 July 1989); and

(b) in the circumstances described in paragraph (a) — by an amount equal to the prescribed percentage of the person’s notional employer benefit as at the end of the previous financial year.

(2) The prescribed percentage is A - B, expressed as a percentage of B where:

A is the all groups consumer price index number for the weighted average of the 8 capital cities published by the Statistician in respect of the March quarter of the year immediately preceding the relevant year; and

B is the highest all groups consumer price index number for the weighted average of the 8 capital cities published by the Statistician in respect of the March quarter of any year earlier than the year immediately preceding the relevant year (except a year earlier than the year that commenced on 1 July 1989).

(3) If the percentage calculated is or includes a fraction of one‑tenth of 1%:

(a) that is less than one‑half of one‑tenth — the fraction is to be disregarded; and

(b) that is not less than one‑half of one‑tenth — the fraction is taken to be one‑tenth.

3 Calculating increase in notional employer benefit in an incomplete year

(1) If, in a financial year:

(a) a person retires on a day other than 1 July; or

(b) a person elects to convert his or her residual employer benefit to a pension on a day other than 30 June;

the amount by which the notional employer benefit increases in that year is worked out using the formula:

where:

full increase means:

(a) if the date of retirement and the date of election do not occur in the same financial year — the amount, calculated in accordance with item 2, by which the person’s notional employer benefit would have increased in the relevant financial year if the person had:

(i) retired on 1 July; or

(ii) elected to convert his or her residual employer benefit to a pension on 30 June

as the case may be; or

(b) if the date of retirement and the date of election occur in the same financial year — the amount, calculated in accordance with item 2, by which the person’s notional employer benefit would have increased in that year if the person had retired on 1 July and had elected to convert his or her residual employer benefit to a pension on 30 June.

number of months means:

(a) if the date of retirement and the date of election do not occur in the same financial year—the number of months in the period that begins:

(i) on the date of retirement and ends on 30 June in that financial year; or

(ii) on 1 July in the financial year in which the election occurs and ends on the date of election:

as the case may be; or

(b) if the date of retirement and the date of election occur in the same financial year — the number of months in the period that begins on the date of retirement and ends on the date of election.

(2) If the period referred to in subitem (1) is less than one month, that period is taken to be one month.

(3) If the period referred to in subitem (1) consists of at least one whole month and a part of a month:

(a) if the number of days in that part is less than one‑half of the number of days in that month — that part is disregarded; and

(b) if the number of days in that part is more than one‑half of the number of days in that month — that part is taken to be a whole month.

4 Interpretation

(1) Subject to subitem (2), if at any time, whether before or after the commencement of the Rules, the Statistician has published or publishes in respect of a particular March quarter an all groups consumer price index number for the weighted average of the 8 capital cities in substitution for an index number published by him or her in respect of that quarter, the publication of the later index number is disregarded for the purposes of this Schedule.

(2) If, at any time, whether before or after the commencement of the Rules, the Statistician has changed or changes the reference base for the Consumer Price Index, then, for the purposes of the application of this Schedule after the change took place or takes place, regard is to be had only to index numbers published in terms of the new reference base.

Schedule 5 Calculation of rate of pension by conversion of employer benefit

(rule 65)

1. For the purpose of converting an employer benefit into a pension, the annual rate of that pension is calculated by dividing the amount of the benefit that is to be so converted by:

(a) if the person’s age, in years, on the day on which he or she becomes entitled to the benefit is 65 years — a factor of 10; or

(b) in any other case where the person’s age is an exact number of years — a factor of 10 increased by 0.2 in respect of each year by which the person’s age, in years, on the day on which he or she becomes entitled to the benefit is less than 65 years; or

(c) in any case where the person’s age is not an exact number of years — the factor that would be applicable if paragraph (b) applied to the person’s age in years, reduced by a number in respect of the number of days in the person’s age in excess of the person’s age in years (in this paragraph called excess days), being a number which bears to 0.2 the same proportion as the number of excess days bears to the number of days in a year.

2. In the application of item 1 in relation to a person who is entitled to invalidity benefits and is:

(a) classified as Class A; or

(b) classified as Class B and entitled to a pension calculated at the rate set out in subparagraph 28 (1) (b) (i);

the references in that paragraph to the person’s age on the day on which he or she becomes entitled to invalidity benefits are read as references to the greater of his or her retiring age immediately before his or her retirement and the age of 55 years.

Schedule 6 Calculation of eligible service

(Schedule 1, definition of eligible service)

1. The eligible service of a member is the sum of:

(a) subject to item 2, service by the person as a member (treating a member who is entitled to invalidity benefits, classified as Class B and entitled to a pension calculated at the rate set out in subparagraph 28 (1) (b) (ii) as if he or she had not been retired on the grounds of invalidity and had elected to convert his or her employer benefit into pension); and

(b) in the case of a person entitled to an invalidity pension who:

(i) is classified as Class A; or

(ii) at the time of his or her death, was classified as Class B and was entitled to a pension that was equal to half the rate of pension payable to a pensioner who had been classified as Class A under rule 22 or 23;

a period equal to the period commencing on the day immediately following the last day of the person’s service and ending on the day on which the person would have retired if he or she had not been retired on the ground of invalidity but had served until the greater of his or her retiring age immediately before his or her retirement and the age of 55 years; and

(c) in the case of a transferred person — a period specified in the following table in relation to that person:

Person

Period included

1. A person who, immediately before he or she transferred from the 1973 Scheme, was rendering continuous full‑time service and who, before he or she began to render that service, was not a 1973 Scheme retirement pensioner. Any period that, before the transfer of the person, was a period of effective service in relation to the person for the purposes of the 1973 Act.

2. A person who, immediately before he or she transferred from the 1973 Scheme, was rendering continuous full‑time service and who, before he or she began to render that service, was a 1973 Scheme retirement pensioner. So much of that period of service rendered by the person after the person ceased to be a 1973 Scheme retirement pensioner and before his or her transfer to the 1991 Scheme as was a period of effective service in relation to the person for the purposes of the 1973 Act.

Person	Period included
1. A person who, immediately before he or she transferred from the 1973 Scheme, was rendering continuous full‑time service and who, before he or she began to render that service, was not a 1973 Scheme retirement pensioner.	Any period that, before the transfer of the person, was a period of effective service in relation to the person for the purposes of the 1973 Act.
2. A person who, immediately before he or she transferred from the 1973 Scheme, was rendering continuous full‑time service and who, before he or she began to render that service, was a 1973 Scheme retirement pensioner.	So much of that period of service rendered by the person after the person ceased to be a 1973 Scheme retirement pensioner and before his or her transfer to the 1991 Scheme as was a period of effective service in relation to the person for the purposes of the 1973 Act.

; and

(d) in the case of a 1973 Scheme (deferred benefit) re‑entrant — so much of the period of effective service in relation to the person for the purposes of the 1973 Act in respect of which the person accrued benefits from which the deferred benefits, which were applicable to the member under the 1973 Act immediately before he or she became a member, derived; and

(e) in the case of a 1973 Scheme (invalidity pay) re‑entrant — any period that, before the person became a member, was a period of effective service in relation to the person for the purposes of the 1973 Act.

2. Service referred to in paragraph 1 (a) does not include:

(a) service during a period:

(i) prescribed in Schedule 2 in respect of which, under subrule 4 (4), salary is taken not to be paid to the member; or

(ii) that was a period of leave of absence without pay granted to the member in respect of which the Department did not pay contributions to the Fund in relation to the member; or

(iii) in respect of which the person accrued an employer benefit that was paid to the person as a lump sum, was converted into a pension or became applicable to the person as a preserved benefit; or

(b) if the member is not an invalidity retiree who is entitled to an invalidity benefit — service during a period:

(i) that occurred after the member has been notified that his or her total benefit has equalled or exceeded his or her lump sum maximum benefit limit and in respect of which the member, in pursuance of rule 5, did not pay contributions to the Fund; or

(ii) that occurred after the member has been notified that his or her total benefit has equalled or exceeded his or her pension maximum benefit limit.

Schedule 7 Calculation of final average salary

(Schedule 1, definition of final average salary)

1. The final average salary, in relation to a person who is or was a member, is an amount equal to:

(a) in the case of a person with less than 1 095 days of service — the amount worked out using the formula:

where:

salary, in relation to the person, means the amount of salary payable to the person during his or her service; and

number of days of service, in relation to the person, means the number of days of service of the person; or

(b) in any other case — one‑third of the amount of salary payable to the person during his or her last 1 095 days of service.

2. For the purpose of ascertaining the amount of salary payable to a person during his or her service or service or last 1 095 days of service, as the case may be, in a case where that service included a period in respect of which the person:

(a) was in receipt of half‑pay; or

(b) was not entitled to be paid salary; or

(c) forfeited his or her salary;

salary is taken to have been payable to the person in respect of that period as if the person were on full pay.

2A. For the purpose of ascertaining the amount of salary payable to a person during his or her service or service (or last 1 095 days of service) as a trainee other ranks who became entitled to an invalidity benefit or died, the person’s salary, for the period of trainee service, is the maximum increment (less service allowance) that is applicable in the period to:

(a) the rank of Private Group 1 in the Army; or

(b) the equivalent rank in the Air Force or Navy that the trainee held.

2B. For the purpose of ascertaining the amount of salary payable to a person during his or her service or service (or last 1 095 days of service) as a trainee officer who became entitled to an invalidity benefit or died, the person’s salary, for the period of trainee service, is the greater of:

(a) the maximum increment (less service allowance) that is applicable, in the period of the person’s service, to the rank of Private Group 1; and

(b) the maximum increment (less service allowance) that is applicable to the person in that period.

3. In this Schedule:

service, in relation to a person, does not include service by the person before a break in the continuity of the person’s service.

trainee means a person who is or was a trainee officer, or trainee other ranks, of the Permanent Forces when he or she became entitled to an invalidity benefit or died.

Schedule 8 Calculation of employer benefit

(Schedule 1, definition of employer benefit)

Part 1 Calculation of employer benefit of members other than particular MBL members

1. This Part applies in relation to a person who:

(a) is an invalidity retiree, other than an invalidity retiree to whom Part 5 applies; or

(b) is a transferred (former recipient) person; or

(c) is a 1973 Scheme (retirement pay) re-entrant; or

(d) is a 1973 Scheme (refunded contributions) re-entrant; or

(e) is a transferred (refunded contributions) person; or

(f) is a 1991 Scheme re-entrant; or

(g) a foreign service member;

other than:

(h) an MBL member who is not an invalidity retiree; or

(i) an invalidity retiree who:

(i) is an MBL member; and

(ii) is classified, or is taken to be classified, as Class C under rule 22.

2. The employer benefit, in relation to a person to whom this Part applies, is worked out using the formula:

where:

FPES means:

(a) for a person mentioned in paragraph (1) (d), (e), (f) or (g) — so much of the person’s eligible service (if any) that is included in the person’s first period of aggregated service; and

(b) in any other case — the person’s first period of eligible service; and

FAS means the person’s final average salary; and

SPES means:

(a) for a person mentioned in paragraph (1) (d), (e), (f) or (g) — so much of the person’s eligible service (if any) that is included in the person’s second period of aggregated service; and

(b) in any other case — the person’s second period of eligible service; and

TPES means:

(a) for a person mentioned in paragraph (1) (d), (e), (f) or (g) — so much of the person’s eligible service (if any) that is included in the person’s third period of aggregated service; and

(b) in any other case — the person’s third period of eligible service; and

3. For the purposes of item 2:

first period of aggregated service, in relation to a person mentioned in paragraph (1) (d), (e), (f) or (g), means:

(a) the first 7 years of aggregated service of the person; or

(b) if the person did not complete 7 years of aggregated service — the period of aggregated service of the person.

first period of eligible service, in relation to a person, means:

(a) the first 7 years of eligible service of the person; or

(b) if the person did not complete 7 years of eligible service — the period of eligible service of the person.

second period of aggregated service, in relation to a person mentioned in paragraph (1) (d), (e), (f) or (g), means:

(a) the first 20 years of aggregated service of the person exclusive of the first 7 years of that service; or

(b) if the person completed 7 but did not complete 20 years of aggregated service — the period of aggregated service of the person exclusive of the first 7 years of that service.

second period of eligible service, in relation to a person, means:

(a) the first 20 years of eligible service of the person exclusive of the first 7 years of that service; or

(b) if the person completed 7 but did not complete 20 years of eligible service — the period of eligible service of the person exclusive of the first 7 years of that service.

third period of aggregated service, in relation to a person mentioned in paragraph (1) (d), (e), (f) or (g), means the period of aggregated service of the person exclusive of the first 20 years of that service.

third period of eligible service, in relation to a person, means the period of eligible service of the person exclusive of the first 20 years of that service.

Part 5 Calculation of employer benefit of particular MBL members

11. The employer benefit, in relation to:

(a) an MBL member who is not an invalidity retiree; or

(b) an MBL member who:

(i) is an invalidity retiree; and

(ii) is classified, or is taken to be classified, as Class C under rule 22;

is worked out in accordance with whichever formula in this Part is applicable to the member.

12. In the case of an MBL member who elected under subrule 5 (2) to cease paying contributions, the formula is:

where:

LSMBMR means the person’s lump sum maximum benefit multiple, worked out in accordance with item 2 of Schedule 3, on retirement; and

TB means the sum of the person’s employer benefit and member benefit on ceasing contributions; and

FASC means the person’s final average salary on ceasing contributions; and

LSMBMC means the person’s lump sum maximum benefit multiple, worked out in accordance with item 2 of Schedule 3, on ceasing contributions; and

FASR means the person’s final average salary on retirement; and

MB means the amount of the person’s member benefit on ceasing contributions.

13. In the case of an MBL member who:

(a) ceased paying contributions because of the operation of subrule 5 (1); or

(b) being a transferred member, did not pay contributions because of the operation of that subrule;

the formula is:

where:

PMBMR means the person’s pension maximum benefit multiple, worked out in accordance with item 4 of Schedule 3, on retirement; and

TB means the sum of the person’s employer benefit and member benefit on ceasing contributions; and

FASC means the person’s final average salary on ceasing contributions; and

PMBMC means the person’s pension maximum benefit multiple, worked out in accordance with item 4 of Schedule 3, on ceasing contributions; and

FASR means the person’s final average salary on retirement; and

MB means the amount of the person’s member benefit on ceasing contributions.

13A. If an MBL member’s benefits have been subject to a family law superannuation payment split under Part 13, the employer benefit will be reduced, at the time of the payment split, in accordance with that Part.

Note The maximum benefit limit in relation to the member is calculated as if there were no benefit reduction under Part 13.

Part 6 Interpretation

14. A reference in this Schedule to an invalidity retiree does not include a reference to a person who, by reason of rule 32, 33 or 34, is not entitled to invalidity benefits.

15. A reference in this Schedule to the aggregated service of a transferred (refunded contributions) person, a 1973 Scheme (refunded contributions) re‑entrant, a 1991 Scheme re‑entrant or a foreign service member, is a reference to the sum of:

(a) the eligible service of that person; and

(b) either:

(i) in the case of a transferred (refunded contributions) person — any other period that, before the person began to render the period of continuous full‑time service which he or she was rendering when he or she transferred to the 1991 Scheme, was a period of effective service in relation to the person for the purposes of the 1973 Act; or

(ii) in the case of a 1973 Scheme (refunded contributions) re‑entrant — any period that, before the person became a member, was a period of effective service in relation to the person for the purposes of the 1973 Act; or

(iii) in the case of a 1991 Scheme re‑entrant — any period that, before the person last became a member, had been a period of eligible service in relation to the person; or

(iv) in the case of a foreign service member — so much of the person’s full‑time service with the forces of a country other than Australia as CSC has directed under the definition of foreign service member is service for the purposes of this Schedule.

Schedule 9 Calculation of member benefit before 1 July 2002

(Schedule 1, definition of member benefit)

1. A member benefit, in relation to a person who is or was a member, is an amount equal to the sum of:

(a) the contributions that have been paid under the Rules by the person on or after he or she began his or her current period of membership; and

(b) in the case of a member to whom a preserved benefit is applicable — the amount of the member benefit (if any) included in that preserved benefit; and

(c) the interest (if any), in respect of the amount in paragraph (a) and of such of the amount in paragraph (b) as is funded, in accordance with a determination or determinations by CSC as to rates of interest and the method of allocation of interest to such amounts; and

(d) an amount equal to the interest, in respect of such of the amount in paragraph (b) as is not funded, which would have accrued after the person last became a member if that amount had been funded; and

(e) in the case of a member who transferred from the 1973 Scheme (not being a person who has since retired and has again become a member):

(i) the person’s transfer value; and

(ii) an amount equal to the interest in respect of that transfer value which would have accrued on or after the date of the person’s transfer if the transfer value had been funded;

less, in the case of a person who paid an amount to the Commonwealth under item 3 of this Schedule or item 3 of Schedule 10 (each item, in this item called a repayment provision), the amount of interest calculated under subparagraph (ii) in respect of so much of the person’s transfer value as is an amount equal to the sum of:

(iii) the amount by which so much of the person’s transfer value as comprised previous contributions is taken to have increased by reason of the recalculation of the person’s transfer value in consequence of the operation of the relevant repayment provision; and

(iv) an amount equal to the amount by which the amount calculated under paragraphs 1 (a) and (b) of Schedule 10 is, by reason of the recalculation of the person’s transfer value in consequence of the operation of the relevant repayment provision, no longer reduced by an amount calculated under paragraphs 1 (c), (d) and (e) of that Schedule;

in respect of the period before the day on which the amount so paid was, in fact, paid; and

(f) in the case of a 1973 Scheme (deferred benefit) re‑entrant:

(i) the person’s carry over value; and

(ii) an amount equal to the interest in respect of that carry over value which would have accrued on or after the date on which the person became a member if the carry over value had been funded.

2. Where a transferred person who retired in the period from and including 27 May 1992 to and including 8 September 1992 (in this item called the relevant period):

(a) had been, before transfer to the Scheme, a person in respect of whom an amount (in this item called the unpaid amount) remained unpaid to the Commonwealth by the person in respect of:

(i) an election by him or her under the previous legislation to have a period of service taken into account as service for pension or as qualifying service; or

(ii) an amount required to be paid by him or her under subsection 87 (3) of the 1973 Act; and

(b) had, before transferring, paid the unpaid amount or a part of that amount to the Commonwealth;

then, the person is entitled to be paid, as additional member benefit, the amount worked out by using the formula:

where:

recalculated member benefit means the member benefit that would have been payable to the person on his or her retirement if paragraph (b) of the definition of previous contributions in Schedule 1 (as in force during the relevant period) had been omitted from that definition; and

original member benefit means the member benefit that was paid or payable to the person on his or her retirement.

3. Where a transferred person who has retired became a transferred person on a day (in this item called the person’s commencement day), and in the application of Schedule 10 to that person on that day:

(a) the calculation of the person’s transfer value required the deduction of an amount (in this paragraph called the deducted amount) in accordance with item 1 of that Schedule from the sum of the amounts referred to in paragraphs 1 (a) and (b) of that Schedule; and

(b) the deducted amount included an amount in respect of an election referred to in paragraph 1 (c) of that Schedule, or an amount referred to in paragraph 1 (e) of that Schedule;

then, if the person pays to the Commonwealth for the purposes of this item, before the expiration of 90 days after the commencement of this item, an amount (in this item called the paid amount) equal to, or less than, the deducted amount, then, the person is entitled to be paid, as additional member benefit, the amount worked out using the formula:

where:

recalculated member benefit means the member benefit that would have been payable to the person on his or her retirement if the person had paid the paid amount to the Commonwealth immediately before the person’s commencement day; and

original member benefit means the member benefit that was paid or payable to the person on his or her retirement.

Schedule 10 Transfer value

(Schedule 1, definition of transfer value)

1. The transfer value, in relation to a transferred person, is an amount equal to the sum of:

(a) previous contributions made by the person under the previous legislation; and

(b) interest in respect of the amount in paragraph (a) which would have accrued before the date of his or her transfer if so much of that amount:

(i) as comprised contributions and additional contributions (within the meaning of the 1973 Act) paid before 1 October 1991 had been earning interest at the annual rates applicable in accordance with Schedule 11; and

(ii) as comprised contributions and additional contributions (within the meaning of the 1973 Act) paid on or after that date had been funded;

less the amount (if any) remaining unpaid to the Commonwealth by the person in respect of:

(c) an election by him or her under the previous legislation to have a period of service taken into account as service for pension or as qualifying service; and

(d) an advance payment made to him or her in respect of a gratuity under:

(i) the previous legislation; or

(ii) the Defence Force (Bounties and Gratuities) Regulations; or

(iii) Determination 0705 made under Part IIIA of the Defence Act 1903; and

(e) an amount required to be paid by him or her under subsection 87 (3) of the 1973 Act.

2. For the purpose of paragraph 1 (b), where, for any period, official records of the fortnightly amounts of contributions paid by a member when he or she was a member of the retirement benefits scheme under the 1948 Act are not available, the contributions paid by the member during that period are taken to have been paid on the date at the middle of that period, unless CSC, having regard to documentary evidence of those contributions produced to CSC by the member, otherwise determines.

3. Where, on a day (in this item called the person’s commencement day) a person became a transferred person (not being a person who has since retired), and in the application of this Schedule to that person on that day:

(a) the calculation of the person’s transfer value required the deduction of an amount (in this item called the deducted amount) in accordance with item 1 from the sum of the amounts referred to in paragraphs 1 (a) and (b); and

(b) the deducted amount included an amount in respect of an election referred to in paragraph 1 (c) or an amount referred to in paragraph 1 (e);

then, if the person pays to the Commonwealth for the purposes of this item, before the expiration of 90 days after the commencement of this item, an amount (in this item called the paid amount) equal to, or less than, the deducted amount, this Schedule applies to the person as if the person had paid the paid amount to the Commonwealth immediately before the person’s commencement day.

4. If:

(a) a transferred person (not being a person who has since retired) is a person who had a right to pay to the Commonwealth, within the time specified in item 3, an amount (referred to in item 3 as the paid amount) equal to, or less than, the deducted amount referred to in item 3; and

(b) CSC is satisfied that the person had not been informed, within the time specified in item 3, of his or her right to pay that paid amount to the Commonwealth;

CSC must give the person notice in writing informing the person of his or her right to pay to the Commonwealth, before the end of 90 days after the day on which the notice is given, that paid amount.

5. If a transferred person (not being a person who has since retired) who has been given notice by CSC under item 4 pays to the Commonwealth, before the end of 90 days after the day on which the notice is given, an amount (in this item called the paid amount) equal to, or less than, the deducted amount referred to in item 3, this Schedule applies to the person as if the person had paid the paid amount to the Commonwealth immediately before the day on which the person became a transferred person.

Schedule 10A Carry over value

(Schedule 1, definition of carry over value)

1. The carry over value, in relation to a 1973 Scheme (deferred benefit) re‑entrant, is an amount equal to the sum of:

(a) previous contributions made by the person under the previous legislation which comprised the benefits from which the deferred benefits, which were applicable to the member under the 1973 Act immediately before he or she became a member, derived; and

(b) interest in respect of the amount in paragraph (a) which would have accrued before the date on which he or she first became a member if so much of that amount:

(i) as comprised contributions and additional contributions (within the meaning of the 1973 Act) paid before 1 October 1991 had been earning interest at the annual rates applicable in accordance with Schedule 11; and

(ii) as comprised contributions and additional contributions (within the meaning of the 1973 Act) paid on or after that date had been funded.

Schedule 11 Annual rates of interest applicable in respect of certain unfunded amounts

(subrule 16 (1) and Schedules 10 and 10A)

1. For the purposes of -subparagraph 1 (b) (i) of Schedule 10 and subparagraph 1 (b) (i) of Schedule 10A:

(a) the annual rate applicable in relation to a complete salary fortnight in a financial year; and

(b) the annual rate applicable in relation to a salary fortnight which concludes in a financial year;

is the rate applicable in relation to that financial year in accordance with the table.

Rates applicable in relation to financial years

A reference in this table to a year is a reference to the financial year ending on 30 June in that year.

Year	Rate
1950	3.19
1951	3.53
1952	4.60
1953	4.50
1954	4.46
1955	4.57
1956	5.35
1957	5.08
1958	4.95
1959	4.88
1960	4.88
1961	5.38
1962	4.81
1963	4.37
1964	4.58
1965	5.15
1966	5.17
1967	5.03
1968	5.11
1969	5.35
1970	6.86
1971	6.83
1972	5.85
1973	6.72
1974	9.52
1975	9.50
1976	9.99
1977	10.41
1978	9.10
1979	10.00
1980	11.76
1981	13.15
1982	16.40
1983	14.85
1984	13.75
1985	13.50
1986	12.95
1987	12.80
1988	11.95
1989	13.50
1990	12.04
1991	11.10
1992	11.10

Schedule 12 Surcharge deduction amount

(Schedule 1, definition of surcharge deduction amount)

1. If a member’s surcharge debt account, or a deceased member’s surcharge debt account, is in debit when benefits become payable to or in respect of the member, CSC must determine, in writing:

(a) the surcharge deduction amount that, in its opinion, it would be fair and reasonable to take into account in working out the amount of the benefits; and

(b) if the benefits have been converted into a pension — the conversion factor for working out the yearly amount that would have to be paid to discharge a liability equal to the surcharge deduction amount.

2. In making the determination, CSC must have regard to the following:

(a) the amount by which the member’s surcharge debt account is in debit when those benefits become payable;

(b) the value of the employer‑financed component of those benefits;

(c) the value of the benefits that, for the purpose of working out (under the Superannuation Contributions Tax (Assessment and Collection) Act 1997) the notional surchargeable contributions factors applicable to the member, were assumed to be likely to be payable to the member on his or her retirement;

(d) whether the member has or had qualified for his or her maximum benefit entitlement under the Rules;

(e) any other matter that CSC considers relevant.

3. The amount determined by CSC for paragraph 1 (a) may not be more than the total of the following amounts:

(a) 15% of the employer‑financed component of any part of the benefits payable to the member that accrued between 20 August 1996 and 1 July 2003;

(b) 14.5% of the employer‑financed component of any part of the benefits payable to the member that accrued in the 2003–2004 financial year;

(c) 12.5% of the employer‑financed component of any part of the benefits payable to the member that accrued in the 2004–2005 financial year.

4. In making a determination for paragraph 1 (b), CSC must also have regard to:

(a) written advice about the conversion factor, prepared by an actuary; and

(b) the person’s age when the benefit becomes payable to the person.

Note A surcharge deduction amount is not subject to a family law superannuation payment split under Part 13.

Note

1. All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See

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Citations

Military Superannuation and Benefits Trust Deed Amendment 2011 (No. 1) (Cth)

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Statutory Material Cited

Percentage of incapacity	Class
60% or more	A
30% or more but less than 60%	B
Less than 30%	C