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Superannuation Act 1988
Part 5Superannuation benefits—old scheme contributors
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Part 5—Superannuation benefits—old scheme contributors
Division 1—Pension benefits
33—Application of this Part
This Part applies only to old scheme contributors.
33A—Transition to retirement
(1) A contributor may apply to the Board for the benefit of this section if—
(a) the contributor has reached—
(i) the age of 55 years; and
(ii) his or her preservation age; and
(b) the contributor has entered into an arrangement with his or her employer—
(i) to reduce his or her hours of work; or
(ii) to alter his or her duties,
or both, with the effect that there is a reduction in the contributor's salary; and
(c) the purpose for establishing the arrangement referred to in paragraph (b) relates to the proposed retirement of the contributor in due course (including by allowing the contributor to scale down his or her work in the lead‑up to retirement).
(2) The Board may require that an application under subsection (1)—
(a) be made in such manner as the Board thinks fit; and
(b) be accompanied by such information or other material specified by the Board to assist the Board to be satisfied as to the matters set out in paragraphs (b) and (c) of that subsection.
(3) If the Board is satisfied that a valid application has been made under subsection (1), the contributor will be entitled to a pension (a draw down benefit) on the basis of the contributor's application and on the basis that the maximum draw down benefit to which the contributor is entitled will be determined by the Board as follows:
B is the maximum draw down benefit (expressed as an amount per fortnight)
RP is the amount that would be payable under section 34 if the contributor had retired from employment immediately before the date of the determination (expressed as an amount per fortnight)
FS is the contributor's actual salary immediately before the commencement of the arrangement envisaged by subsection (1)(b)
NS is the contributor's actual salary on the commencement of the arrangement envisaged by subsection (1)(b).
(4) A draw down benefit may not be commuted until the contributor retires from employment.
(5) If a contributor who has retired from employment applies for the commutation of a draw down benefit within 6 months after the commencement of the payment of the draw down benefit, the benefit may be commuted in accordance with the regulations as if it were a pension.
(6) If a contributor who has retired from employment applies for the commutation of a draw down benefit after the expiration of the period that applies under subsection (5), the terms and conditions of the commutation of the benefit will be as determined by the regulations.
(7) A draw down benefit will be indexed as if it were a pension under this Act.
(8) When the Board has determined a draw down benefit—
(a) the contributions payable by the contributor under section 23 will (despite any provision made by section 23 to the contrary)—
(i) be fixed on the basis of the contributor's salary under the arrangement established with his or her employer (for so long as the arrangement continues); and
(ii) as so fixed, be payable in respect of this salary from the first full pay period after the Board's determination of the draw down benefit; and
(iii) be at the contributor's standard contribution rate under that section; and
(b) the contributor's contribution points will accrue, from the date of the determination until the cessation of the relevant arrangement (unless the contributor ceases to make the contributions envisaged by paragraph (a)), at a rate for each contribution month determined as follows:
CP is a proportion of 1 contribution point
AS is the contributor's actual salary under the relevant arrangement (as adjusted from time to time)
FSA is the contributor's actual salary immediately before the commencement of the relevant arrangement, adjusted from time to time to take into account any changes to the salary that would have occurred had the contributor not entered into the relevant arrangement but rather continued to be entitled to that salary.
(9) If the employment arrangements of a contributor who is receiving a draw down benefit under this section alter so that there is an alteration in his or her salary—
(a) in the case of a reduction in salary—the contributor may apply to the Board for a further benefit in accordance with the provisions of this section and this section will then apply to the application and with respect to the relevant arrangement—
(i) as if FS under subsection (3) is the contributor's actual salary immediately before the relevant reduction in salary; and
(ii) as if NS under subsection (3) is the contributor's actual salary immediately after the relevant reduction in salary; and
(iii) by applying such other modifications as may be necessary for the purpose or as may be prescribed; and
(b) in the case of an increase in salary—the draw down benefit will continue as if the increase had not occurred, subject to any adjustments made on account of the benefit, including as to contributions and the accrual of contribution points, as may be prescribed by the regulations.
(10) When a contributor retires from employment (and is thus entitled to a benefit under section 34), the contributor's entitlement under section 34 will be adjusted in the manner prescribed by the regulations to take into account the draw down benefit provided under this section (and that section will then have effect accordingly).
(11) If a contributor's employment terminates on account of invalidity in circumstances that give rise to an entitlement under section 37, the entitlement under that section will be adjusted in the manner prescribed by the regulations to take into account the fact that the contributor had elected to receive a draw down benefit under this section (and that section will then have effect accordingly).
(12) If a contributor's employment is terminated by the contributor's death, any entitlement under section 38 will be adjusted in the manner prescribed by the regulations to take into account the fact that the contributor had elected to receive a draw down benefit under this section (and that section will then have effect accordingly).
(13) The determination of a benefit under this section must take into account the operation of any provision under Part 5A.
(14) Despite a preceding subsection, if a contributor who has been receiving a draw down benefit returns to a level of employment that is at least equal to the level that applied immediately before the contributor commenced the arrangement referred to in subsection (1)(b) (the original level of employment), the payment of the draw down benefit will be suspended for so long as his or her level of employment is at least equal to the original level of employment (and any adjustments in connection with the operation of this section prescribed by the regulations will apply).
(15) A contributor who has a rollover account by virtue of the operation of section 47B may, if authorised to do so under the regulations, in conjunction with an application under subsection (1), apply for any benefit that would be payable with respect to that account as if the contributor had resigned from employment and, in such a case—
(a) the benefit must be invested in accordance with the regulations; and
(b) the investment may be redeemed when the contributor retires from employment under this Act.
(16) The Governor may, by regulation, declare that any provision of this section is modified in prescribed circumstances (and the regulation will have effect according to its terms).
34—Retirement
(1) A contributor who retires on or after reaching the age of retirement and who is not entitled to a pension under subsection (2), is entitled to a pension calculated as follows:
(i) in the case of a contributor who was accepted as a contributor under the repealed Act before reaching the age of 30 years—the number of months between the date of acceptance and the age of retirement;
E is—
(a) in relation to a contributor whose contribution period at the age of retirement was 360 months or more—600;
(b) in relation to a contributor whose contribution period at the age of retirement was 300 months or more but less than 360 months—1 200
X is the number of months by which the contributor's age at retirement exceeds the age of retirement
n is 420 or the aggregate number of contribution points that accrued to the contributor between 1 July 1992 and the date of retirement whichever is the lesser (for the purposes of this definition contribution points will be taken to accrue to a contributor who is no longer making contributions because of section 23(7) at the rate of 1 point per month).
(2) A contributor (other than a contributor whose membership of the Scheme antedates the commencement of the repealed Act) who retires on or after reaching the age of retirement is entitled to a pension calculated in accordance with the following formula if the number of months between the date of the contributor's acceptance as a contributor and the date on which the contributor reached the age of retirement was less than 300:
Z is the numerical value obtained by dividing the number of the contributor's accrued contribution points by the number of months in the contribution period
A is the number of months in the contribution period on the date on which the contributor reached the age of retirement
B is the number of months between the day on which the contributor reached the age of retirement and the day on which he or she retired reduced by the number of months (if any) in that period during which the contributor was not an active contributor
C is the number obtained from Schedule 2 by reference to the value of A applicable to the contributor
n is 420 or the aggregate number of contribution points that accrued to the contributor between 1 July 1992 and the date of retirement whichever is the lesser (for the purposes of this definition contribution points will be taken to accrue to a contributor who is no longer making contributions because of section 23(7) at the rate of 1 point per month).
(3) A contributor who retires after reaching the age of 55 years but before the age of retirement is entitled to a pension calculated as follows:
(i) in the case of a contributor who was accepted as a contributor under the repealed Act before reaching the age of 30 years—the number of months between the date of acceptance and the date of retirement;
n1 is 420 or the aggregate number of contribution points that accrued to the contributor between 1 July 1992 and the date of retirement whichever is the lesser
n2 is the number of months between the day on which the contributor reached the age of 55 years and the day on which he or she retired.
(4) A retirement pension will be indexed.
(5) The amount of a retirement pension will be the amount calculated under this section or 75 per cent of the contributor's actual or attributed salary immediately before retirement (expressed as an amount per fortnight), whichever is the lesser.
(6) For the purposes of this section, a contributor retires from employment if—
(a) the contributor has attained the age of 55 years and the contributor's employment terminates or is terminated before the contributor reaches the age of retirement for any reason except invalidity (in circumstances entitling the contributor to benefits under this Act), retrenchment or death; or
(b) the contributor's employment terminates or is terminated on or after the contributor reaches the age of retirement for any reason (except the contributor's death).
(7) This section does not apply to an outplaced employee.
35—Retrenchment
(a) a contributor's employment is terminated by retrenchment;
(b) the contributor has reached the age of 45 years but not the age of retirement;
(c) the contributor has been a contributor for not less than 5 years;
(d) the Board is satisfied that there is no suitable employment (being employment attracting a salary of at least 80% of the salary applicable to the former employment) available to the contributor,
the contributor is entitled to a pension and a lump sum under this section.
(2) The amount of the pension is calculated as follows:
(b) the numerical value obtained by dividing the number of the contributor's contribution points by—
(i) in the case of a contributor who was accepted as a contributor under the repealed Act before reaching the age of 30 years—the number of months between the contributor's age as at the date of acceptance and the age of retirement;
(ii) in any other case—360.
FS is the contributor's actual or attributed salary (expressed as an amount per fortnight) immediately before retrenchment.
(2a) In subsection (2)—
contribution points means—
(a) in the case of a contributor who was an active contributor immediately before retrenchment—extrapolated contribution points;
(b) in the case of a contributor who was not an active contributor immediately before retrenchment—accrued contribution points.
(2b) The amount of the lump sum under subsection (1) is calculated as follows:
LS is the lump sum
(a) in the case of a contributor who was in full-time employment during that part of the contribution period occurring after 31 December 1987—1;
(b) in any other case—the numerical value arrived at by expressing the contributor's employment while an active contributor during that part of the contribution period as a proportion of full-time employment during that part of the contribution period
FS is the contributor's actual or attributed salary (expressed as an annual amount) immediately before retrenchment
(3) A retrenchment pension will be indexed.
(a) a contributor's employment is terminated by retrenchment; and
(b) the contributor is not entitled to a pension and a lump sum under subsection (1); and
(c) the contributor has not made an election under subsection (6),
the contributor is entitled to a lump sum payment.
(5) The lump sum is made up of 2 components—
(a) an employee component (to be charged against the contributor's contribution account) equivalent to the amount standing to the credit of the contributor's contribution account; and
(b) an employer component calculated as follows:
A is the aggregate of the contributor's contributions unless that aggregate amount exceeds what it would have been if the contributor had contributed throughout the contribution period at the standard contribution rate, in which case A is the latter amount
P is the amount (if any) of pension paid under this Act or the repealed Act to the contributor
(a) in the case of a contributor who was in full-time employment during that part of the contribution period occurring after 31 December 1987—1;
(b) in any other case—the numerical value arrived at by expressing the contributor's employment while an active contributor during that part of the contribution period as a proportion of full-time employment during that part of the contribution period
FS is the contributor's actual or attributed salary (expressed as an annual amount) immediately before retrenchment
(6) If a contributor whose employment is terminated by retrenchment but who is not entitled to a pension and a lump sum under subsection (1) makes an election under this subsection by written notice to the Board within 3 months after termination of the employment, the contributor will be taken—
(a) if the contributor had not reached the age of 55 years at the termination of his or her employment—to have resigned and elected to preserve his or her accrued superannuation benefits; or
(b) if the contributor had reached that age at the termination of his or her employment—to have retired.
36—Temporary disability pension
(1) Subject to this section, a contributor—
(a) who is temporarily or permanently incapacitated for work but whose employment has not been terminated on that ground; and
(b) who has not reached the age of retirement,
is entitled to a disability pension.
(2) A contributor who becomes incapacitated for work in a particular position will not be regarded as incapacitated for work for the purposes of this section if some other position, carrying a salary of at least 80 per cent of the salary applicable to the former position, is available to the contributor and the contributor could reasonably be expected to take that other position.
(3) A disability pension is not payable in respect of—
(a) a period in respect of which the contributor is entitled to sick leave; or
(b) a period in respect of which the contributor is entitled to weekly payments of workers compensation; or
(c) a period for which the contributor is on recreation leave or long service leave.
(4) The Board will not pay a disability pension in respect of a period of incapacity of less than 1 week and may decline to pay a disability pension if it appears that the duration of the incapacity is likely to be less than 6 months.
(5) The amount of the pension is calculated as follows:
(b) the numerical value obtained by dividing the number of the contributor's extrapolated superannuation points by—
(i) in the case of a contributor who was accepted as a contributor under the repealed Act before reaching the age of 30 years—the number of months between the contributor's age as at the date of acceptance and the age of retirement;
(ii) in any other case—360.
FS is the contributor's actual or attributed salary (expressed as an amount per fortnight) immediately before the pension becomes payable.
(6) A disability pension cannot be paid for a continuous period of more than 12 months unless the Board thinks that there are special reasons for extending that limit, in which case it may extend the pension period by not more than a further 6 months.
(7) A disability pension cannot be paid, in respect of the same incapacity, for an aggregate period of more than 18 months in any 1 period of 36 months.
(8) A contributor is not required to make any contribution over a period for which the contributor receives a disability pension but will be credited with contribution points and contribution months in respect of any such period as if the contributor were contributing at the standard contribution rate in respect of that period.
36A—Rehabilitation etc of disability pensioner
(1) If, in the opinion of the Board, an attempt should be made to rehabilitate a disability pensioner or to find alternative employment for such a pensioner, the Board may serve notice on the pensioner's employer requiring the employer to do 1 or both of the following:
(a) take measures specified in the notice to rehabilitate the pensioner;
(b) take measures specified in the notice to find alternative employment for the pensioner.
(2) A notice under subsection (1) may require the employer to periodically report in writing to the Board on the progress it is making in complying with the requirements of the notice.
(3) If an employer does not comply with a notice under subsection (1) to the satisfaction of the Board, the Board may, by further notice served on the employer, require the employer to reimburse the Treasurer for the amount of the disability pension paid to the pensioner from the date of service of that notice until the Board informs the employer in writing that it is satisfied with the employer's compliance with the original notice.
(4) The amount of the pension referred to in subsection (3) is a debt due by the employer to the Treasurer and the prescribed proportion of that amount must not be charged against the contributor's contribution account under section 43A.
37—Invalidity
(1) If a contributor's employment terminates on account of invalidity and the Board is satisfied that the contributor's incapacity for all kinds of work is 60 per cent or more of total incapacity and is likely to be permanent, the contributor is entitled to a pension under this section.
(2) The amount of the pension is calculated as follows:
FS is the contributor's actual or attributed salary (expressed as an amount per fortnight) immediately before termination of employment
(b) the numerical value obtained by dividing the number of the contributor's contribution points by—
(i) in the case of a contributor who was accepted as a contributor under the repealed Act before reaching the age of 30 years—the number of months between the date of acceptance and the age of retirement;
n is—
(a) 420; or
(b) the sum of the aggregate of the contributor's contribution points that accrue after 30 June 1992 and the number of months difference between the contributor's age as at the entitlement day and the age of retirement,
whichever is the lesser.
(2a) In subsection (2)—
contribution points means—
(a) in the case of a contributor who was an active contributor immediately before termination of employment—extrapolated contribution points;
(b) in the case of a contributor who was not an active contributor immediately before termination of employment—accrued contribution points.
(3) The pension will be indexed.
(3a) If the Board is not satisfied as to 1 or both of the matters referred to in subsection (1) the contributor is entitled to a superannuation payment that is the greater of the following:
(a) twice the contributor's adjusted salary immediately before termination of employment (expressed as an annual amount); or
(b) an amount made up of 2 components—
(i) an employee component (to be charged against the contributor's contribution account) equivalent to the amount standing to the credit of the contributor's contribution account; and
(ii) an employer component calculated as follows:
(i) in the case of a contributor who was accepted under the repealed Act before reaching the age of 30 years—the number of months between the age of acceptance and the age of 55 years;
(ii) in any other case—300
FS is the contributor's actual or attributed salary immediately before termination of employment (expressed as an annual amount)
(a) in the case of a contributor who was in full-time employment during that part of the contribution period occurring after 31 December 1987—1;
(b) in any other case—the numerical value arrived at by expressing the contributor's employment while an active contributor during that part of the contribution period as a proportion of full-time employment during that part of the contribution period
(3b) A superannuation payment under subsection (3a)(a) will be made up of 2 components—
(a) an employee component (to be charged against the contributor's contribution account) equivalent to the amount standing to the credit of the contributor's contribution account; and
(b) an employer component being the difference between the employee component and twice the contributor's actual or attributed salary immediately before termination of employment (expressed as an annual amount).
(3c) If—
(a) a contributor's employment terminates on account of invalidity; and
(b) the Board is not satisfied as to 1 or both of the matters referred to in subsection (1); and
(c) the contributor makes an election under this subsection by written notice to the Board within 3 months after receiving written notice from the Board of its decision under paragraph (b),
the contributor will be taken—
(d) if the contributor had not reached the age of 55 years at the termination of his or her employment—to have resigned and elected to preserve his or her accrued superannuation benefits; or
(e) if the contributor had reached that age at the termination of his or her employment—to have retired.
(4) A contributor's employment will be taken to have terminated on account of invalidity if and only if—
(a) the employer (acting with the written approval of the Board) terminates the employment on the ground of the contributor's invalidity; or
(i) the employer or the contributor satisfies the Board (before termination of employment) that the contributor is incapacitated for work in the contributor's present position and that there is no other position, carrying a salary of at least 80 per cent of the salary applicable to the contributor's present position, which the contributor could reasonably be expected to take, available to the contributor; and
(ii) the contributor has been on sick leave, weekly payments of workers compensation, or disability pension for at least 12 months or periods aggregating at least 12 months on account of the invalidity; and
(iii) after notice has been given to the Board as required by the regulations, the employer terminates the employment or the contributor resigns from employment.
(5) Despite any other Act or law to the contrary an employer cannot terminate the employment of a contributor on the ground of invalidity unless the requirements of subsection (4)(a) or (b) have been satisfied.
38—Death of contributor
(1) If a contributor dies, the following provisions apply:
(a) if the contributor is survived by a spouse—the spouse is entitled to a pension equal to two-thirds of the deceased contributor's notional pension; and
(b) if the contributor is survived by a spouse and an eligible child or eligible children—each eligible child is entitled to a pension in accordance with subsection (2); and
(c) if the contributor is not survived by a spouse but is survived by an eligible child or eligible children—the contributor's estate is entitled to a lump sum in accordance with subsection (6) and each eligible child is entitled to a pension in accordance with subsection (2); and
(d) if the contributor's employment is terminated by the contributor's death and the contributor is not survived by a spouse or an eligible child—the contributor's estate is entitled to a lump sum in accordance with subsection (7).
(1b) However, a surviving spouse will not be entitled to a benefit under this section if section 43AG applies to the spouse and the amount of any benefit payable to a person must take into account any reduction that has been made under section 43AF.
(2) Subject to subsection (3) the amount of the pension for each eligible child is as follows:
(a) if a pension is being paid to a surviving spouse—
(i) if there are no more than 2 eligible children—a pension equal to one‑ninth of the deceased contributor's notional pension;
(ii) if there are 3 or more eligible children—a pension calculated by dividing one-third of the deceased contributor's notional pension by the number of eligible children;
(b) if no pension is being paid to a surviving spouse—
(i) if there is 1 eligible child—a pension equal to 45% of the deceased contributor's notional pension;
(ii) if there are 2 eligible children—a pension equal to 40% of the deceased contributor's notional pension;
(iii) if there are 3 eligible children—a pension equal to 30% of the deceased contributor's notional pension;
(iv) if there are 4 or more eligible children—a pension calculated by dividing the deceased contributor's notional pension by the number of eligible children.
(3) If the amount of a pension for an eligible child would, but for this subsection, be less than the prescribed amount, the pension will be equal to the prescribed amount.
(4) A reference in this section to a deceased contributor's notional pension is—
(a) if the contributor's employment had terminated before the date of death—a reference to the amount of the contributor's pension immediately before his or her death or, if portion of that pension was commuted to a lump sum before the commencement of this Act and no further commutation has occurred after the commencement of this Act, a reference to the amount of the pension to which the contributor would have been entitled immediately before his or her death if no portion of the pension had been commuted;
(b) if the contributor's employment terminated on his or her death and the contributor reached the age of retirement on or before the date of death—a reference to the amount of the retirement pension to which the contributor would have been entitled if he or she had retired on the date of death;
(c) if the contributor's employment terminated on his or her death, the contributor had not reached the age of retirement on the date of death and the contributor was an active contributor immediately before the date of death—a reference to the amount of the retirement pension to which the contributor would have been entitled if he or she had not died and—
(i) had continued in employment until reaching the age of retirement (but without change to the contributor's actual or attributed salary as at the date of death); and
(ii) had been credited with a number of contribution points in respect of the period from the date of death to the age of retirement equivalent to—
(A) in the case of a contributor who had been in full-time employment throughout the contribution period—the number of months between the end of the last complete month of the contribution period and the age of retirement (an incomplete month being counted as a whole month);
(B) in the case of a contributor who had not been in full-time employment throughout the contribution period—the number that bears the same proportion to the number of months referred to in subsubparagraph (A) as the contributor's employment while an active contributor bears to full-time employment; and
(iii) had retired on reaching the age of retirement;
(d) if the contributor's employment terminated on his or her death, the contributor had not reached the age of retirement on the date of death and the contributor was not an active contributor immediately before the date of death—a reference to the amount of the retirement pension to which the contributor would have been entitled if he or she had reached the age of retirement on the date of death and had retired on that date.
(5) A deceased contributor's notional pension will be indexed as if it were (or remained) an actual pension and consequential adjustments will be made to pensions calculated by reference to the notional pension.
(6) The lump sum to be paid to the estate of a contributor who is not survived by a spouse but is survived by an eligible child or eligible children will be charged against the contributor's contribution account to the extent of the amount standing to the credit of the account and will be—
(a) if the contributor's employment was terminated by the contributor's death and the contributor was an active contributor immediately before his or her death—the greater of the following amounts:
(i) an amount equivalent to the amount standing to the credit of the contributor's contribution account;
(ii) an amount equivalent to twice the amount of the contributor's adjusted salary immediately before the contributor's death (expressed as an annual amount);
(b) in any other case—an amount equivalent to the amount standing to the credit of the contributor's contribution account.
(7) If a contributor's employment is terminated by the contributor's death and the contributor is not survived by a spouse or an eligible child a lump sum will be paid to the estate of the contributor made up of 2 components—
(a) an employee component (to be charged against the contributor's contribution account) equivalent to the amount standing to the credit of the contributor's contribution account; and
(i)
(ii)
FS is the contributor's actual or attributed salary immediately before the contributor's death (expressed as an annual amount)
(a) in relation to a contributor who was at the date of death under the age of 60 years—the lesser of 60 and the number of months by which the contributor's age fell short of 60 years;
(a) in the case of a contributor who was in full-time employment during that part of the contribution period occurring after 31 December 1987—1;
(b) in any other case—the numerical value arrived at by expressing the contributor's employment while an active contributor during that part of the contribution period as a proportion of full-time employment during that part of the contribution period
39—Resignation and preservation of benefits
(1) A contributor who resigns from employment before reaching the age of 55 years may elect—
(a) to take immediately an amount (to be charged against the contributor's contribution account) equivalent to the total balance of the account; or
(b) to preserve his or her accrued superannuation benefits.
(1a) A contributor who fails to inform the Board in writing of his or her election under subsection (1) within 3 months after resignation will be taken to have elected to preserve his or her accrued superannuation benefits.
(1b) If the Board is of the opinion that the limitation period referred to in subsection (1a) would unfairly prejudice a contributor, the Board may extend the period as it applies to the contributor.
(1c) If a contributor resigns and elects to take the amount referred to in subsection (1)(a) the contributor is also entitled to a superannuation payment in accordance with the following provisions:
(a) the contributor may at any time require the Board to make the payment to some other superannuation fund or scheme approved by the Board;
(ab) the Board must—
(i) not less than 6 months before the contributor's 60th birthday—notify the contributor in writing of the contributor's entitlement to require the Board to make the payment under paragraph (b); and
(ii) not less than 6 months before the contributor's 55th birthday—notify the contributor in writing of the contributor's entitlement to require the Board to make the payment under paragraph (c);
(b) the contributor may at any time after reaching the age of retirement require the Board to make the superannuation payment and, if no such requirement has been made on or before the date on which the contributor reaches 65 years of age, the Board will make the payment;
(c) if the contributor has reached the age of 55 years and is not employed by an employer within the meaning of the Commonwealth Act the contributor may require the Board to make the payment to the contributor;
(d) if the contributor has become incapacitated and satisfies the Board that his or her incapacity for all kinds of work is 60 per cent or more of total incapacity and is likely to be permanent, the Board will make the payment to the contributor;
(e) if the contributor dies, the payment will be made to the spouse of the deceased contributor or, if he or she left no surviving spouse, to the contributor's estate,
(and a payment under any of the above paragraphs excludes further rights so that a claim cannot be subsequently made under some other paragraph).
(1d) The amount of the superannuation payment referred to in subsection (1c) is the aggregate of—
(a) an amount calculated as follows:
(a) in the case of a contributor who was in full-time employment during that part of the contribution period occurring after 31 December 1987—1;
(b) in any other case—the numerical value arrived at by expressing the contributor's employment while an active contributor during that part of the contribution period as a proportion of full-time employment during that part of the contribution period
AFS is the contributor's actual or attributed salary as at the date of resignation (expressed as an annual amount) adjusted to reflect changes in the Consumer Price Index since the date of resignation
M is the number of months of the contributor's contribution period occurring after 31 December 1987 and before 1 July 1992; and
(b) the amount (if any) of the minimum contribution required to avoid payment of the superannuation guarantee charge in respect of the contributor under the Commonwealth Act together with interest from the date of resignation.
(1da) The amount of interest will be calculated and credited to the contributor at the end of each financial year and will be calculated on the amount referred to in subsection (1d) at the end of the first financial year and on the aggregate of that amount and the interest previously credited at the end of each subsequent financial year.
(1db) The rate of interest will be determined by the Board in respect of each financial year in accordance with section 20A.
(2) If a contributor resigns after a contribution period of less than 120 months and elects to preserve his or her accrued superannuation benefits, the following provisions apply—
(aa) the Board must, not less than 6 months before the contributor's 55th birthday, notify the contributor in writing of the contributor's entitlement to require the Board to make a superannuation payment under paragraph (a);
(a) the contributor may at any time after reaching 55 years of age require the Board to make a superannuation payment and, if no such requirement has been made on or before the date on which the contributor reaches 65 years of age, the Board will make such a payment;
(b) if the contributor has become incapacitated and satisfies the Board that his or her incapacity for all kinds of work is 60 per cent or more of total incapacity and is likely to be permanent, the Board will make the payment to the contributor;
(c) if the contributor dies, a payment will be made to the spouse of the deceased contributor or, if he or she left no surviving spouse, to the contributor's estate,
(and a payment under any of the above paragraphs excludes further rights so that a claim cannot be subsequently made under some other paragraph).
(3) A payment under subsection (2) will be made up of 2 components—
(a) an employee component (to be charged against the contributor's contribution account) equivalent to the total balance of the account; and
(b) an employer component that is the aggregate of—
(i) an amount that is, subject to subsection (4), equal to 2⅓ times the amount of the employee component; and
(ii) an amount calculated as follows:
(a) in the case of a contributor who was in full-time employment during that part of the contribution period occurring after 31 December 1987—1;
(b) in any other case—the numerical value arrived at by expressing the contributor's employment while an active contributor during that part of the contribution period as a proportion of full-time employment during that part of the contribution period
AFS is the contributor's actual or attributed salary as at the date of resignation (expressed as an annual amount) adjusted to reflect changes in the Consumer Price Index since the date of resignation
(4) The amount referred to in subsection (3)(b)(i) cannot exceed 2⅓ times the amount that would have constituted the employee component if the contributor had contributed at the standard rate of contribution throughout the contributor's contribution period.
(5) If a contributor resigns after a contribution period of 120 months or more and elects to preserve his or her accrued superannuation benefits, the following provisions apply—
(aa) the Board must, not less than 6 months before the contributor's 55th birthday, notify the contributor in writing of the contributor's entitlement to require the payment of a retirement pension under paragraph (a);
(a) the contributor may, at any time after reaching 55 years of age require the Board to commence paying a retirement pension and, if no such requirement has been made on or before the date on which the contributor reaches 60 years of age, the Board will commence paying a retirement pension as from that date;
(b) if the contributor has become incapacitated and satisfies the Board that his or her incapacity for all kinds of work is 60 per cent or more of total incapacity and is likely to be permanent, the Board will pay an invalid pension to the contributor;
(c) if the contributor dies and is survived by a spouse (not being a person who became the contributor's spouse after the contributor's resignation and less than 5 years before the date of his or her death), a pension will be paid to the spouse of the deceased contributor;
(d) if the contributor dies and is survived by a spouse and an eligible child or eligible children, a pension will be paid to each eligible child;
(e) if the contributor dies and is not survived by a spouse but is survived by an eligible child or eligible children, a lump sum will be paid to the contributor's estate and a pension will be paid to each eligible child;
(f) if the contributor dies and is not survived by a spouse or an eligible child a lump sum will be paid to the contributor's estate.
(6) Subject to subsection (7), a pension payable under subsection (5) will be calculated in the same way as if—
(a) the contributor had continued in his or her former employment between the date of resignation and the date on which a pension first became payable under that subsection but had elected to make no contribution in respect of that period;
(b) the contributor's actual or attributed salary for the purpose of calculating the pension were that salary as at the date of resignation adjusted to reflect changes in the Consumer Price Index between the date of resignation and the date on which the pension first became payable;
(c) in the case of a retirement pension—the contributor had retired on the date on which the retirement pension first became payable under this section;
(d) in the case of an invalid pension—the contributor's employment had been terminated on the ground of invalidity on the date on which he or she satisfied the Board of the matters referred to in subsection (5)(b).
(7) When calculating a pension under subsection (6) in respect of a contributor who was accepted as a contributor before the prescribed age and before the commencement of the repealed Act, a factor in the relevant formula designated "A" will be replaced by a factor calculated as follows:
A1 is the substituted factor
A is the factor designated "A" in the relevant formula
(a) in the case of a contributor for whom the age of retirement is 55 years—360;
(b) in the case of a contributor for whom the age of retirement is 60 years—
(i) in the case of a retirement pension where the contributor is 55 years or more but less than 60 years when the pension first becomes payable—300 + n;
(ii) in all other cases—360
NM is the number of months between the date on which the contributor was accepted as a contributor and—
(a) in the case of a retirement pension—the date on which the pension first became payable or the date on which the contributor reached or will reach the age of retirement whichever occurs first;
(b) in all other cases—the date on which the contributor will reach, or would have reached, the age of retirement
CP is the number of months in the contribution period to the date of resignation
S is the number of months in the contribution period after the date on which the contributor reached the prescribed age
n is the number of months between the day on which the contributor reached the age of 55 years and the day on which the pension first became payable.
(7a) In subsection (7)—
prescribed age means—
(a) in relation to a contributor for whom the age of retirement is 55 years—the age of 25 years;
(b) in relation to all other contributors—the age of 30 years.
(8) If a retirement pension calculated in accordance with subsection (7) exceeds the pension to which the contributor would have been entitled if he or she had continued in employment from the date of resignation to the date on which the retirement pension first became payable under this section and had contributed at the standard contribution rate over that period, the pension will be reduced to that latter amount.
(8a) The lump sum to be paid to the estate of a contributor who is not survived by a spouse but is survived by an eligible child or eligible children will be the amount standing to the credit of the contributor's contribution account and will be charged against that account.
(8b) The lump sum to be paid to the estate of a contributor who is not survived by a spouse or an eligible child will be made up of 2 components—
(a) an employee component (to be charged against the contributor's contribution account) equivalent to the amount standing to the credit of the contributor's contribution account; and
(i)
(ii)
AFS is the contributor's actual or attributed salary as at the date of resignation (expressed as an annual amount) adjusted to reflect changes in the Consumer Price Index from the date of resignation until the contributor's death
(a) in relation to a contributor who was at the date of death under the age of 60 years—the lesser of 60 and the number of months by which the contributor's age fell short of 60 years;
(a) in the case of a contributor who was in full-time employment during that part of the contribution period occurring after 31 December 1987—1;
(b) in any other case—the numerical value arrived at by expressing the contributor's employment while an active contributor during that part of the contribution period as a proportion of full-time employment during that part of the contribution period
(8c) Subject to this Act, benefits under this section will be calculated by using the appropriate formula in force under this Part on the day on which the contributor resigned or is taken to have resigned by virtue of some other provision of this Act.
(9) The right to preserve accrued superannuation benefits under this section does not apply for the benefit of a contributor who was, when he or she resigned, an employee—
(a) of the Australian National Railways Commission; or
(b) of a prescribed employer.
(10) Subsection (9)(a) does not apply to former employees of the Australian National Railways Commission who resigned to take up employment with the National Rail Corporation.
(10a) For the purposes of this section, a contributor will be taken to resign if the contributor's employment terminates or is terminated for any reason except invalidity (in circumstances entitling the contributor to benefits under this Act), retrenchment or death.
(10b) A contributor who is taken by clause 7(6)(a) of Schedule 2 of the State Bank (Corporatisation) Act 1994 to have resigned from his or her employment and to have elected to preserve his or her accrued benefits under this section will, for the purposes of the application of subsection (5), be taken to have resigned after a contribution period of 120 months or more.
(11) This section does not apply to, or in relation to, an outplaced employee who resigned from employment before reaching the age of 55 years unless he or she has made an election in accordance with section 39C to preserve his or her accrued superannuation benefits under this section or is taken under section 39C to have made such an election.
39A—Resignation or retirement pursuant to a voluntary separation package
(1) This section applies to a contributor who resigns or retires from his or her employment before reaching the age of retirement pursuant to a voluntary separation package—
(a) that includes a term that this section is to apply to the contributor; and
(b) that has been approved by the Treasurer.
(2) Section 34 or 39 does not apply to a contributor to whom this section applies.
(3) A contributor to whom this section applies who resigns before reaching the age of 55 years is entitled—
(a) if he or she had not reached the age of 45 years at resignation—to benefits under subsection (3a); or
(b) if he or she had reached that age at resignation—to benefits under subsection (3a) unless he or she elects (as a term of the voluntary separation package) to take benefits under subsection (3g).
(3a) A contributor who is entitled to benefits under this subsection is entitled to a lump sum made up of—
(a) an employee component (to be charged against the contributor's contribution account) equivalent to the total balance of the account; and
(b) an employer component that is equal to the lesser of 2.5 times the amount of the employee component or 2.5 times the amount that would have constituted the employee component if the contributor had contributed at the standard contribution rate throughout the contributor's contribution period.
(3b) A part of the lump sum referred to in subsection (3a) being an amount equivalent to the minimum contribution required to avoid payment of the superannuation guarantee charge in respect of the contributor under the Commonwealth Act is preserved.
(3c) The contributor is entitled to the balance of the lump sum at the time of resignation.
(3d) The amount preserved under subsection (3b) together with interest is payable in accordance with the following provisions:
(aa) the Board must, not less than 6 months before the contributor's 55th birthday, notify the contributor in writing of the contributor's entitlement to require payment of the amount under paragraph (a);
(a) the contributor may at any time after reaching 55 years of age require the Board to pay the amount and, if no such requirement has been made on or before the date on which the contributor reaches 65 years of age, the Board will pay the amount to the contributor;
(b) if the contributor has become incapacitated and satisfies the Board that his or her incapacity for all kinds of work is 60 per cent or more of total incapacity and is likely to be permanent, the Board will pay the amount to the contributor;
(c) if the contributor dies, the amount will be paid to the spouse of the deceased contributor or, if he or she left no surviving spouse, to the contributor's estate,
(and a payment under any of the above paragraphs excludes further rights so that a claim cannot be subsequently made under some other paragraph).
(3e) The amount of interest will be calculated and credited to the contributor at the end of each financial year and will be calculated on the amount referred to in subsection (3b) at the end of the first financial year and on the aggregate of that amount and the interest previously credited at the end of each subsequent financial year.
(3f) The rate of interest will be determined by the Board in respect of each financial year in accordance with section 20A.
(3g) A contributor who is entitled to benefits under this subsection is entitled to a pension calculated as follows:
FS is the contributor's actual or attributed salary (expressed as an amount per fortnight)
A is the lesser of the following
(i) in the case of a contributor who was accepted as a contributor under the repealed Act before reaching the age of 30 years—the number of months between the date of acceptance and the date of resignation;
(ii) in any other case—the number of months between the contributor's 30th birthday and the date of resignation
X is the contributor's age at resignation in years and completed months expressed to 2 decimal places
n is 420 or the aggregate number of contribution points that accrued to the contributor between 1 July 1992 and the date of resignation whichever is the lesser.
(3h) An election under subsection (3)(b) must be made within 3 months after the date of resignation.
(3i) A pension under subsection (3g) will be indexed.
(4) A contributor to whom this section applies who retires on or after reaching the age of 55 years is entitled to a lump sum that is equivalent to the amount that the contributor would have received if section 34 had applied to the contributor and he or she—
(a) had been entitled to commute the whole of his or her retirement pension; and
(b) had commuted the whole of the pension pursuant to the regulations.
voluntary separation package means an agreement between a contributor and his or her employer pursuant to which the contributor resigns or retires from employment.
39B—Outplaced employees—55 and over
(1) A contributor who had reached the age of 55 years when he or she retired from employment to take up employment in the private sector pursuant to an offer of employment in a contracting out agreement may elect—
(a) to preserve his or her accrued superannuation benefits under section 39 as though he or she had resigned from employment before reaching the age of 55 years; or
(b) to take the benefit provided by section 39A.
(2) A contributor who fails to inform the Board in writing of his or her election under subsection (1) within 1 month after retiring will be taken to have made an election under subsection (1)(a).
(3) If the Board is of the opinion that the limitation period referred to in subsection (2) would unfairly prejudice a contributor, the Board may extend the period as it applies to the contributor.
(4) If a contributor has made, or is taken to have made, an election under subsection (1)(a), section 39 applies to, and in relation to, the contributor except that—
(a) section 39(5) (instead of section 39(2)) will apply to, and in relation to, a contributor whose contribution period is less than 120 months; and
(b) the contributor is not entitled to require the Board to commence paying a retirement pension under section 39(5)(a), and the Board must not commence paying such a pension under that provision, until the contributor has ceased employment with the private sector employer.
(5) If the contributor has made an election under subsection (1)(b), section 39A applies to the contributor as though the requirements of section 39A(1) had been met.
39C—Outplaced employees under 55
(1) A contributor who had not reached the age of 55 years when he or she resigned from employment to take up employment in the private sector pursuant to an offer of employment in a contracting out agreement may elect—
(a) to preserve his or her accrued superannuation benefits under section 39; or
(b) to take the benefits provided by section 39A.
(2) A contributor who fails to inform the Board in writing of his or her election under subsection (1) within 1 month after resigning will be taken to have made an election under subsection (1)(a).
(3) If the Board is of the opinion that the limitation period referred to in subsection (2) would unfairly prejudice a contributor, the Board may extend the period as it applies to the contributor.
(4) If a contributor has made, or is taken to have made, an election under subsection (1)(a), section 39 applies to, and in relation to, the contributor except that (subject to subsection (5))—
(a) section 39(5) (instead of section 39(2)) applies to, and in relation to, a contributor whose contribution period is less than 120 months; and
(b) the contributor is not entitled to require the Board to commence paying a retirement pension under section 39(5)(a), and the Board must not commence paying such a pension under that provision, until the contributor has reached the age of 55 years and has ceased employment with the private sector employer.
(5) A contributor who has made, or is taken to have made, an election under subsection (1)(a) and whose contribution period is less than 120 months may inform the Board in writing within 1 month after resigning that section 39(2) and not section 39(5) is to apply to, and in relation to, the contributor and in that case—
(a) section 39(2) applies to, and in relation to, the contributor; but
(b) the contributor is not entitled to require the Board to make a superannuation payment under section 39(2)(a), and the Board must not make a superannuation payment under that provision until the contributor has reached the age of 55 years and has ceased employment with the private sector employer.
(6) If the Board is of the opinion that the limitation period referred to in subsection (5) would unfairly prejudice a contributor, the Board may extend the period as it applies to the contributor.
(7) If the contributor has made an election under subsection (1)(b), section 39A applies to the contributor as though the requirements of section 39A(1) had been met.
Division 2—General
40—Commutation of pension
(1) The Board will, on the application of a person who is entitled to a pension (other than a temporary disability pension or an eligible child's pension), commute a pension, or a proportion of a pension, to a lump sum payment.
(2) The right of commutation is subject to the qualifications prescribed by regulation.
(3) In the commutation of a pension, commutation factors promulgated by regulation will be applied.
(4) The amount of a commutation factor fixed under subsection (3) may reflect the loss of the benefit provided by section 38(4)(a) or section 47(3) as a result of the commutation of the pension or a proportion of the pension.
40A—Commutation to pay deferred superannuation contributions surcharge
(1) The Board will, on the application of a contributor who is entitled to a pension (other than a temporary disability pension) and who is liable for a deferred superannuation contributions surcharge, commute so much of the pension as is required to provide a lump sum equivalent to the amount of the surcharge.
(2) An application under subsection (1) must be made in writing to the Board before the expiration of the period of 3 months immediately following the date on which the notice given to the contributor by the Commissioner of Taxation under section 15(7) of the Superannuation Contributions Tax Act was issued.
(i) a contributor who is liable for a deferred superannuation contributions surcharge dies before notice by the Commissioner of Taxation under section 15(7) of the Superannuation Contributions Tax Act is issued; or
(ii) a contributor who is liable for a deferred superannuation contributions surcharge dies within 3 months after the issue of such a notice without having commuted his or her pension under subsection (1); and
(b) the contributor is survived by a spouse who is entitled to a pension as the contributor's spouse under this Act,
the Board will, subject to subsection (5) on the application of the spouse, commute so much of the spouse's pension as is required to provide a lump sum equivalent to the amount of the surcharge.
(4) An application under subsection (3) must be made in writing to the Board before the expiration of the period of 6 months immediately following the contributor's death or the issue of the notice under section 15(7) of the Superannuation Contributions Tax Act, whichever is the later.
(5) The Board must not commute a pension under subsection (3) unless it is satisfied that the resulting lump sum will be applied in payment of the surcharge or be used to reimburse the deceased contributor's estate, or the spouse or other person who has paid the surcharge on behalf of the estate.
(6) The commutation factors to be applied in the commutation of a pension under this section will be determined by the Treasurer on the recommendation of an actuary.
(7) If the Board is satisfied that—
(a) a contributor, or the spouse of contributor, is entitled to commute the whole of his or her pension under section 40 and has done so except for a part that the contributor or spouse wishes to retain for the purpose of commutation under this section in order to pay the contributor's deferred superannuation contributions surcharge; and
(b) after commutation under this section for that purpose there will still be a part of the pension remaining uncommuted; and
(c) the part of the pension originally retained for commutation under this section was a reasonable estimate of the amount of the pension that would be required for that purpose,
the Board will, on the application of the contributor or spouse made at the same time as his or her application under subsection (1) or (3), commute the remaining uncommuted part of the pension using the factors applicable under section 40.
40AB—Commutation to pay Division 293 tax
(1) The purpose of this section is to facilitate the payment of amounts by the Board to the Commissioner of Taxation as required under Schedule 1 Subdivision 135‑C of the Taxation Administration Act in connection with Division 293 tax payable by contributors.
(2) If a Division 293 release authority for a contributor who is entitled to a pension is given to the Board in accordance with Schedule 1 Subdivision 135‑B of the Taxation Administration Act, the Board must—
(a) commute so much of the contributor's pension as is necessary to provide a lump sum equal to the release amount required to be paid by the Board in respect of the contributor under Schedule 1 section 135‑75 of the Taxation Administration Act; and
(b) pay the lump sum resulting from the commutation to the Commissioner of Taxation.
(3) The commutation factors to be applied in the commutation of a pension under this section will be determined by the Treasurer on the recommendation of an actuary.
(4) If the Board is satisfied that—
(a) a contributor is entitled to commute the whole of his or her pension under section 40 and has done so except for a part that the contributor wishes to retain for the purpose of commutation under this section in order to meet the contributor's liability for Division 293 tax; and
(b) after commutation under this section for that purpose there will still be a part of the pension remaining uncommuted; and
(c) the part of the pension originally retained for commutation under this section was a reasonable estimate of the amount of the pension that would be required for that purpose,
the Board will, on the application of the contributor made after a Division 293 release authority for the contributor is given to the Board, commute the remaining uncommuted part of the pension using the factors applicable under section 40.
40B—Interaction with judicial remuneration or pension entitlements
(1) If a person would, but for this subsection, be entitled to—
(a) the payment of a pension under this Act; and
(b) the payment of—
(i) salary as a Judge for judicial service; or
(ii) a judicial‑related pension,
the right to the payment of a pension under this Act is suspended.
(2) Subject to this section, the Board will, on the application of a person whose pension is suspended under subsection (1), commute the entitlement to the pension to a lump sum payment.
(3) An application for commutation must be made—
(a) in the case of a suspension under subparagraph (i) of subsection (1)(b)—within 6 months after the pension is suspended due to the circumstances applying under that subparagraph;
(b) in the case of a suspension under subparagraph (ii) of subsection (1)(b)—within 3 months after the pension is suspended due to the circumstances applying under that subparagraph.
(a) an application is not made under subsection (3)(a); and
(b) the person ceases to receive salary as a Judge for judicial service without an entitlement to a judicial‑related pension,
the suspension will cease.
(5) If an application is not made under subsection (3)(b) within the period that applies under that provision, it will be taken that the person has made the application in any event.
(6) In making the commutation, commutation factors promulgated by regulation will be applied.
Judge has the same meaning as in the Judges' Pensions Act 1971;
judicial-related pension means a pension under the Judges' Pensions Act 1971;
judicial service has the same meaning as in the Judges' Pensions Act 1971.
41—Medical examination etc of invalid pensioner
(1) The Board may from time to time require an invalid pensioner who has not reached the age of retirement—
(a) to submit to a medical examination by a specified medical practitioner; or
(b) to undergo specified medical treatment; or
(c) to avail himself or herself of specified assistance.
(2) The cost of a medical examination under this section will be met by the Board.
(3) A pensioner will not be required to submit to a particular form of medical treatment if there is a conflict of opinion between recognised medical experts as to the desirability of the treatment.
(4) If a pensioner fails to comply with a requirement under this section, the Board may suspend the pension until the requirement is complied with.
42—Suspension of pension if pensioner declines appropriate employment
(1) If appropriate employment is offered, at the request of the Minister, to an invalid or retrenchment pensioner who has not reached the age of retirement, the following provisions apply:
(a) if the pensioner accepts the offer and returns to employment—the pension will terminate but the former pensioner will be credited with contribution points and contribution months as if he or she had continued in employment and contributed at the standard contribution rate over the period of absence from employment;
(b) if the pensioner does not accept the offer—the Board may suspend the pension until the pensioner reaches the age of retirement.
(2) In determining whether a particular form of employment is appropriate to a particular pensioner, the following factors will be taken into account—
(a) the pensioner's qualifications;
(b) the pensioner's previous employment;
(c) the pensioner's state of health;
(d) the place at which the employment is available.
(3) Employment will not be regarded as appropriate to a particular pensioner if the rate of salary applicable to the employment (expressed as an hourly rate) is less than 80 per cent of the rate of the pensioner's notional salary (expressed as an hourly rate).
42A—Offer of lump sum to certain invalid pensioners
(a) the Board is satisfied on the advice of 2 medical practitioners that an invalid pensioner who has not reached the age of retirement is fit to be employed in full time or part time employment; but
(b) appropriate employment has not been offered to the pensioner under section 42,
the Board may offer to pay a lump sum to the pensioner instead of his or her pension.
(2) The amount of the lump sum will be the greater of the following:
(a) an amount equivalent to the amount that would be produced by commutation of the whole of a pension calculated as follows:
P is the pension
P1 is the pension to which the pensioner was entitled immediately before the payment of the lump sum (expressed as an annual amount)
M is the number of complete months between the time when the lump sum is paid and when the pensioner would reach the age of retirement;
(b) an amount equivalent to 3 times the amount of the pensioner's annual pension immediately before the lump sum is paid.
(3) For the purposes of the commutation referred to in subsection (2)—
(a) the commutation factors applicable on the commutation of a retirement pension will be used; and
(b) the contributor's age will be taken to be his or her age when the lump sum is paid or 55 years whichever is the greater.
(4) If the pensioner accepts the Board's offer under subsection (1), the pensioner's right to future payments of the pension and all derivative rights cease on payment of the lump sum.
43—Notional extension of period of employment
If—
(a) a contributor becomes entitled, on termination of his or her employment, to a pension; and
(b) the contributor was, immediately before termination of employment, entitled to a period of recreation leave and is paid, or entitled to, a lump sum in lieu of that leave,
the contributor's employment will be taken to have been extended for a period equivalent to the period of recreation leave and the contributor is liable for contributions in respect of that period and is entitled to benefits at the end of that period as though he or she had remained in employment and had received the lump sum as salary during that period.
43AA—Closure of contribution accounts
(1) The Board may close the account of a contributor if—
(a) the contributor has retired or resigned from employment and is in receipt of a pension under this Part; or
(b) the contributor's employment has been terminated by retrenchment or on account of invalidity and the contributor—
(i) has reached the age of retirement; and
(ii) is in receipt of a pension under this Part; or
(c) the contributor has died.
(2) If, after a contribution account has been closed under subsection (1), a benefit becomes payable under this Part that depends wholly or partly on the balance standing to the credit of the account, the benefit will be determined on the basis of the balance that would have stood to the credit of the account if it had not been closed.