Veterans' Entitlements (Pension Valuation Factor) Determination 1998 (Cth)

Veterans’ Entitlements (Pension Valuation

Factor) Determination 1998

made under the Veterans’ Entitlements Act 1986

Instrument 1998No.9  

I, BRUCE SCOTT, Minister for Veterans’ Affairs, make this

determination under subsection 52B(3) of the Veterans’

Entitlements Act 1986 .

Dated   Seventeenth September   1998 

Bruce Scott

Minister for Veterans’ Affairs

Part 1       Introductory

1. Name of determination

This determination is the Veterans' Entitlements

(Pension Valuation Factor) Determination 1998.

1. Commencement

This determination commences on 20 September 1998.

1. Definitions

In this determination:

Act means the Veterans' Entitlements Act 1986.

relevant year means the 12 month period for which the value

of a person's income stream is being worked out for section 52B

of the Act.

Note The following terms used in this determination

are defined in the Act:

·   defined benefit income stream.

·   governing rules.

1. Purpose of determination

(1) This determination sets out the pension valuation factor that applies

to a person for a relevant year for section 52B of the Act.

(2) The pension valuation factor is worked out in different ways,         depending on whether the person's defined benefit income stream is     

indexed by a discretionary determination by trustees of the defined          

benefit income stream fund or in a non-discretionary way in

accordance with governing rules of the fund paying the person's

income stream.

(3) This determination also sets out a way of treating different non-

discretionary ways of indexing a person's defined benefit income

stream so as to treat similar real levels of indexing in the same way

regardless of the way the indexing is done.

Part 2Pension valuation factor and

index factor

1. Pension valuation factor — indexation of income stream

by not more than 8%

If the indexation factor for a person's defined benefit income stream for
  a relevant year, as worked out in accordance with section 6 or 7, is not    

more than 8%, the pension valuation factor that applies to the person      

for that year is the pension valuation factor mentioned in the Schedule     

for:

(a)the age of the person on the person's next birthday following the beginning of the relevant year; and

(b)   the indexation factor for the person's income stream.

1. Indexation factor — non-discretionary indexation of income

stream

(1)For section 5, if, under the governing rules of the fund paying a person's defined benefit income stream, the income stream is indexed in a non-discretionary way, the indexation factor for the income stream is worked out in accordance with this section.

(2)If the income stream is indexed by reference to movements in salary, the indexation factor is taken to be a rate of at least 7% but less than 8%.

(3)If the income stream is indexed by reference to movements in a price index published by the Australian Statistician, the indexation factor is taken to be a rate of at least 6% but less than 7%.

(4)If the income stream is indexed in accordance with a rate set by the governing rules, the indexation factor is taken to be the range of rates set out in the Schedule that includes that rate.

(5)For this section, an income stream is indexed in a non-discretionary way if it is indexed otherwise than as described in subsection 7(1).

1. Indexation factor — discretionary indexation of

income stream

(1)   For section 5, if, under the governing rules of the fund paying a

person’s defined benefit income stream, the income stream is indexed

by discretionary determination of trustees of the fund, the indexation

factor for the income stream is worked out in accordance with this

section.

(2) Unless subsection (4) applies, the indexation factor is the average of the

indexation factors determined for the person’s income stream for the 5

years immediately preceding the relevant year.

(3)   The average of the indexation factors is the sum of the indexation

factors determined for the person’s income stream, or for a class of

income streams that includes the person’s income stream, for the 5

years, divided by 5.

(4) If the fund has been in existence, or making income stream payments to

the person, for less than 5 years, the indexation factor is taken to be a

rate of at least 6% but less than 7%.

1. Pension valuation factor — indexation of income stream

by more than 8%

(1)   If the indexation factor for a person's defined benefit income stream

for a relevant year, as worked out in accordance with section 6 or 7,

is more than 8%, the pension valuation factor that applies to the

person for that year is determined in accordance with this section.

(2)   The Minister must seek advice from the Australian Government      Actuary of the appropriate pension valuation factor for the person for      

the relevant year.

(3)   The Minister must determine the appropriate pension valuation factor

that applies to the person for the relevant year, having regard to the         

advice given by the Australian Government Actuary.

(4)   Application may be made to the Administrative Appeals Tribunal for       

review of a determination under subsection (3).

NoteFor telling a person affected by a determination of the right of review, see section 27A of the Administrative Appeals Tribunal Act 1975 and the Code of Practice made under section 27B of that Act.

Schedule            Pension valuation factors

(section 5)

Indexation factor for person’s income stream
Age of person on next birthday	8%	At least 7% but less than 8%	At least 6% but less than 7%	At least 5% but less than 6%	At least 4% but less than 5%	At least 3% but less than 4%	At least 2% but less than 3%	At least 1% but less than 2%	Less than 1%
Pension valuation factor
20 or less	34	27	22	19	16	14	12	11	10
21 to 25	32	26	22	18	16	14	12	11	10
26 to 30	30	25	21	18	16	14	12	11	10
31 to 35	28	23	20	17	15	13	12	11	10
36 to 40	26	22	19	16	14	13	11	10	9
41 to 45	23	20	17	15	14	12	11	10	9
46 to 50	20	18	16	14	13	11	10	9	9
51 to 55	18	16	14	13	12	11	10	9	8
56 to 60	15	14	12	11	10	10	9	8	8
61 to 65	12	11	11	10	9	8	8	7	7
66 to 70	10	9	9	8	8	7	7	6	6
71 to 75	8	7	7	7	6	6	6	5	5
76 to 80	6	6	5	5	5	5	4	4	4
81 to 85	4	4	4	4	4	4	3	3	3
86 to 90	3	3	3	3	3	3	3	2	2
91 to 95	2	2	2	2	2	2	2	2	2
96 to 100	2	2	2	2	2	2	2	2	2
101+	1	1	1	1	1	1	1	1	1