Document ID: chunk:federal_register_of_legislation:F2011C00487:front:0:p7
Version: federal_register_of_legislation:F2011C00487
Segment Type: other
Provision Reference: 
Character Range: 15053–17832

this section.

2.07 Annual rate of associate deferred pension

 (1) For paragraph 146MC (1) (b) of the Act, the annual rate at which an associate deferred pension is to be paid is calculated as follows:

Step 1   Identify the unfunded component in relation to the transfer amount at the operative time.

         Note   Paragraph 146MC (1) (b) of the Act requires the rate of associate deferred pension to be calculated by reference to the unfunded amount.
Step 2A  Increase the unfunded component in relation to the transfer amount for any period between the operative time and the time at which the associate deferred pension first becomes payable, using the Treasury bond rate for the last working day of the financial year ending immediately before the period for which the increase is being calculated for bonds with a 10 year term.

         Note   The period between the operative time and the time at which the associate deferred pension first becomes payable may include a number of full financial years, or may occur entirely within a single financial year.
         Treasury bond rate for bonds with a 10 year term

         The Treasury bond rate for the last working day of a financial year for bonds with a 10 year term is:
            (a) if any Treasury bonds with that term were issued on that day — the annual yield on those bonds; or
            (b) in any other case — the annual yield on Treasury bonds with that term, as published by the Reserve Bank of Australia for that day.
         Calculation of increase in transfer amount

         The increase in the unfunded component is calculated:
            (a) at the end of each financial year that occurs between the operative time and the time at which the associate deferred pension first becomes payable; and
            (b) immediately before the associate deferred pension first becomes payable;

         using the applicable Treasury bond rate for the relevant period worked out in steps 2B, 2C and 2D, and compounded period by period.

Step 2B  First period

         Identify the shorter of:
            (a) the period between the operative time and the end of the financial year in which the operative time occurs; and
            (b) the period between the operative time and the day before the associate deferred pension becomes payable.

         This is the first period.
         Multiply the number of days in the first period by the Treasury bond rate for bonds with a 10 year term that is applicable to the financial year in which the first period occurs, and divide the result by 365.

         Round the result to 3 decimal places.

         The result is the applicable Treasury bond rate for the first period.
Step 2C  Full financial years (if any)

         Use this step if a full