Commutation of pension – former member
25 Commutation of pension – former member
A former member who is entitled to a pension under section 19 or 22 may, within the period of 6 months after ceasing to be a member, by notice in writing to the Commissioner, elect to convert all or part of the former member's pension entitlement to a lump sum payment determined in accordance with subsection (2).
A lump sum payment under subsection (1) shall be equal to the higher amount resulting from the application of the following
2 formulas:
R x P x (10 –
)
R x 2.5 x D
where:
R is the proportion of pension to be commuted.
P is the annual amount of pension entitlement.
Y is:
where the person has not attained the age of
66 years –
0; or
in any other case – the number of completed years between the age of the person at the time of electing for commutation and 65.
D is the value of the person's accumulation account at the time of his or her ceasing to be a member.
A former member who makes an election under subsection (1) shall be entitled to receive a lump sum payment calculated under subsection (2) and from the date of payment of that lump sum the annual pension payable to that former member shall be reduced by the amount of annual pension in respect of which the election was made.
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