Calculation of benefits after payment of release authority lump sum
146RE Calculation of benefits after payment of release authority lump sum
If a release authority lump sum is paid in relation to a release authority issued to a person, the benefits to which the person is entitled under this Act must be reduced to reflect the release authority lump sum, in accordance with the person’s election under section 146RC.
If the election specifies that a pension is to be reduced (but not to zero), the annual rate of the pension is to be reduced so that it equals the amount worked out using this formula:
Start formula Pre-reduction rate minus start fraction Reduced release authority lump sum over Conversion factor end fraction end formula
where:
conversion factor means the factor that is applicable to the person under the determination made by CSC under subsection (4).
pre‑reduction rate means the annual rate of the pension that would, apart from this section (but having regard to any other provisions of this Act that affect that rate), be payable to the person on the pension reduction day mentioned in subsection (3).
reduced release authority lump sum means:
the amount of the release authority lump sum, reduced by the sum of each reduction made under a previous application of this section to a lump sum benefit to which the person is entitled; or
if more than one release authority lump sum is paid in relation to release authorities issued to the person—the total amount of those release authority lump sums, reduced by the sum of each reduction made under an application of this section, before the last of those release authority lump sums is paid, to a lump sum benefit to which the person is entitled.
The reduction mentioned in subsection (2) takes effect from the day (the pension reduction day) that is:
if the pension has not started to be paid—the first pension pay day; or
if the pension has started to be paid—the first pension pay day that occurs 14 days after the release authority was given to CSC.
CSC may, by legislative instrument, determine the conversion factor, or the method for working out the conversion factor, for the purposes of subsection (2).
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