Document ID: chunk:federal_register_of_legislation:F2024C00321:reg:55:p76
Version: federal_register_of_legislation:F2024C00321
Segment Type: reg
Provision Reference: reg 55 (pt 76/83)
Character Range: 596619–599423

factors and a method determined by an actuary.

Division 3

Associate preserved benefit
16.3.1 Associate preserved benefit consists of:
         (a) a lump sum equal to the funded component of the separation amount, together with interest (if any) in respect of that amount in accordance with a determination or determinations by CSC as to rates of interest and method of allocation taking into account any reduction under paragraph 16.5.2(a); and
         (b) a lump sum equal to the unfunded component of the separation amount, increased as follows taking into account any reduction under paragraph 16.5.2(b):

Step 1  Identify the unfunded component of the separation amount at the operative time.
Step 2  Increase the unfunded component for any period between the operative time and the time at which the associate preserved benefit 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 preserved benefit 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 separation 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 preserved benefit first becomes payable; and
           (b) immediately before the associate preserved benefit first becomes payable;
        using the applicable Treasury bond rate for the relevant period worked out in steps 3, 4 and 5, and compounded period by period.
Step 3  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 preserved benefit 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