10Notional employer contribution rate—defined benefits

#### 10 Notional employer contribution rate—defined benefits (1) For the purposes of this section: > DF, in relation to a person: (a) who has not turned 45—is 0.3; or (b) who has turned 45 but has not turned 65—is the number that is calculated by multiplying 0.00125 by: (i) in the case of a person whose age, expressed in months, when the person withdraws from a superannuation scheme is a whole number of months—the number that is equal to 780 less the number of months; or (ii) in the case of a person whose age, expressed in months, when the person withdraws from a superannuation scheme exceeds a whole number of months—the number that is equal to 779 less the number of months; or (c) who has turned 65—is 0. > FOTE is: (a) if a benefit accruing in respect of membership after 30 June 2008 is expressed in the governing rules of a superannuation scheme as a multiple of the annual ordinary time earnings of the person as at the day on which the person withdraws from the scheme—0.0833; or (b) if a benefit accruing in respect of membership after 30 June 2008 is expressed in the governing rules of the scheme as a multiple of the average annual ordinary time earnings of the person in the period of 3 years ending on the day on which the person withdraws from the scheme—0.09; or (c) if a benefit accruing in respect of membership after 30 June 2008 is expressed in those governing rules as a multiple of the average annual ordinary time earnings of the person in a particular number of years of membership of the person ending on the day on which the person withdraws from the scheme:  where: A is the number of years specified in the governing rules of the scheme ending on the day on which the person withdraws from the scheme. > FSAL is: (a) if SAL is the annual salary of the person, calculated in accordance with the governing rules of the scheme applicable as at 30 June 1992, as at the day on which the person withdraws from the scheme—0.0833; or (b) if SAL is the average annual salary of the person in the period of 3 years ending on the day on which the person withdraws from the scheme, calculated in accordance with the governing rules of the scheme applicable as at 30 June 1992—0.09; or (c) if SAL is the average annual salary of the person in a number of years, specified in the governing rules of the scheme, ending on the day on which the person withdraws from the scheme, calculated in accordance with the governing rules of the scheme applicable as at 30 June 1992:  where: A is the number of years specified in the governing rules of the scheme ending on the day on which the person withdraws from the scheme. > MB has the same meaning as in subsection (5). > MCR, in relation to a member of a superannuation scheme, is the rate at which contributions are paid by the member into a superannuation fund in respect of the scheme for the period from 1 July 2008, being a rate that is expressed, for the purposes of the governing rules of the scheme, as a percentage of the member’s annual ordinary time earnings. > MRB means the minimum requisite benefit in respect of the person. > NM, in relation to contributions to a superannuation scheme in respect of a person that are made after 30 June 2008, is: (a) in the case of a person who withdraws from the scheme at the end of a period that is a whole number of months after the day on which the first contribution was made—that whole number; and (b) in the case of a person who withdraws from the scheme at the end of a period that exceeds a whole number of months after the day on which the first contribution was made—the number that is equal to the sum of: (i) that whole number; and (ii) the fraction that is calculated by dividing the number of days in the month in which the person withdrew from the scheme, up to and including the day of withdrawal, by the total number of days in that month. > NM1, in relation to contributions to a superannuation scheme in respect of a person that are made between 1 July 1992 and 30 June 2008, is: (a) if the number of months from the day on which the first contribution was made to 30 June 2008 is a whole number—that whole number; and (b) if the number of months from the day on which the first contribution was made to 30 June 2008 exceeds a whole number—the number that is equal to the sum of: (i) the whole number; and (ii) the fraction that is calculated by dividing the number of days in the month in which the first contribution was made, from the day the first contribution was made to the end of the last day of the month, by the total number of days in that month. > OTE is: (a) if a benefit accruing in respect of the period from 1 July 2008 is expressed in the governing rules of a superannuation scheme as a multiple of the annual ordinary time earnings of a member of that scheme as at the day on which the member withdraws from the scheme—the member’s annual rate of ordinary time earnings as at that day; or (b) if a benefit accruing in respect of the period from 1 July 2008 is expressed in the governing rules of the scheme as a multiple of the average annual ordinary time earnings of a member of the scheme in a period referred to in paragraph (b) or (c) of the definition of FOTE—the member’s average annual rate of ordinary time earnings in the relevant period. > PAB1 means that part of the minimum requisite benefit that accrued to the person before 1 July 1992, calculated in accordance with subsection (6). > PAB2 means that part of the minimum requisite benefit that accrued to the person between 1 July 1992 and 30 June 2008, calculated in accordance with subsection (7). > SAL is the annual salary of the member on the day on which the member withdraws from the scheme, calculated in accordance with the governing rules of the scheme applicable as at 30 June 1992, or if a benefit is expressed in the governing rules of the scheme applicable as at 30 June 1992 as a multiple of the annual salary of the member averaged over a period, the member’s average annual rate of salary in the relevant period. > SAL1 is the amount that would have been SAL if the member had withdrawn from the scheme on 30 June 1992. > TCR has the same meaning as in subsection (4). > TR, in relation to a complying superannuation scheme, is the rate of tax payable in respect of the scheme in relation to the low tax component (within the meaning of the Income Tax Assessment Act 1997) of the taxable income of the scheme. (2) The notional employer contribution rate in relation to a defined benefit superannuation scheme in respect of a class of employees is calculated in accordance with this section if: (a) MCR and TCR are greater than 0, and have not changed since 1 July 1992; and (b) MCR and TCR are the same in respect of each employee in the class; and (c) TR has not changed since 1 July 2008; and (d) the definition of SAL in the governing rules of the scheme did not change between 1 July 1992 and 30 June 2008; and (e) no part of the minimum requisite benefit constitutes an element untaxed in the fund of the taxable component (within the meaning of the Income Tax Assessment Act 1997); and (f) the benefit certificate to which the notional employer contribution rate relates is in respect of a single superannuation scheme; and (g) the date of effect of the benefit certificate is on or after 1 July 2008; and (h) the minimum requisite benefit as at 30 June 2008 in respect of each employee in the class was equal to the amount calculated using the formula:  with the values of SAL and DF determined as at 30 June 2008 and the value of A calculated in accordance with subsection (6); and (i) the minimum requisite benefit accruing in respect of the period from 1 July 2008 in respect of each employee in the class is prescribed in the governing rules of the scheme as a multiple of: (i) the annual ordinary time earnings of the employee as at the day when the employee withdraws from the fund; or (ii) the average annual ordinary time earnings of the employee in a period ending when the employee withdraws from the scheme. (3) The notional employer contribution rate in relation to a class of employees specified in a benefit certificate relating to a defined benefit superannuation scheme is calculated using the formula:  (4) TCR is calculated using the formula:  (5) MB is calculated using the formula:  (6) PAB1 is calculated using the formula:  where: > A is the lesser of: (a) the amount of the benefit vested in the member as at 30 June 1992 in accordance with the governing rules of the superannuation scheme; and (b) the amount of the benefit that has accrued in respect of the member as at 30 June 1992 in accordance with those governing rules. (7) PAB2 is calculated using the formula: