5Meaning of component of a superannuation interest

5 Meaning of component of a superannuation interest

(1) A part of a superannuation interest that a person has as a member of an eligible superannuation plan is a component of the superannuation interest if: (a) the part has distinct features and characteristics; and (b) the part has requirements that must be met before a benefit in respect of the part becomes payable to the member; and (c) the part does not make up the entire superannuation interest. (2) However, a benefit payable in respect of the superannuation interest or a component of the superannuation interest is not itself a component of the superannuation interest.

Note: A component of a superannuation interest that a member has in an eligible superannuation plan is a constituent part of the superannuation interest that gives rise, or may give rise, to an entitlement to a benefit or benefits. A benefit may:

(a) be paid in a range of different forms (for example, a lump sum or a pension); and
(b) become payable upon satisfying particular conditions of release (for example, retirement, resignation, invalidity or death).

Note: Each benefit payable, or potentially payable, is not itself a component.

Note: Example 1: A person has a superannuation interest as a member of an eligible superannuation plan. Under the plan, if the member permanently retires the member becomes entitled to:

(a) in all cases—benefits based on the member’s account balance at the time of retirement; and
(b) if the retirement is not due to invalidity—benefits in the form of a lump sum, or payments from a lifetime pension, calculated by reference to defined benefit factors; and
(c) if the retirement is due to invalidity—benefits in the form of payments from a lifetime pension, calculated by reference to defined benefit factors.

Note: The part of the member’s superannuation interest that gives rise to their entitlement to the benefits mentioned in paragraph (a) is one component of the interest. The part of the member’s superannuation interest that gives rise to their entitlement to the benefits mentioned in paragraph (b) or (c) is another component of the interest. The benefits are not themselves components.

Note: Example 2: A person who has a superannuation interest as a member of an eligible superannuation plan has retired permanently. As a result, the member is entitled to:

(a) benefits paid in the form of a pension drawn from the member’s account balance and commencing at the time of retirement; and
(b) benefits payable in the form of a lifetime pension only if and when the member reaches 80 years of age.