BENDZULLA ACTUARIAL PTY LTD
CONSULTING ACTUARIES
GPO BOX 1181, HOBART, TASMANIA 7001. LEVEL 3, 33 SALAMANCA PLACE, HOBART, 7000
TELEPHONE 1800 203 123    FACSIMILE 1800 103 123
ABN 13 009 492 219

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REASONABLE BENEFIT LIMITS (RBL)

Recent RBL Limits

Income Year Lump Sum Pension
1994/1995 $400,000 $800,000
1995/1996 $418,000 $836,000
1996/1997 $434,720 $869,440
1997/1998 $454,718 $909,435
1998/1999 $471,088 $942,175
1999/2000 $485,692 $971,382
2000/2001 $506,092 $1,012,181
2001/2002 $529,373 $1,058,742
2002/2003 $562,195 $1,124,384
2003/2004 $588,056 $1,176106
2004/2005 $619,223 $1,238,440
2005/2006 $648,946 $1,297,886
2006/2007 $678,149 $1,356,291

  • The pension limit will apply if at least 50% of total RBL assessed values are taken as a complying pension or annuity.

  • Standard Lump Sum RBL are discounted by 2.5% for each whole year between the person's current age and their 55th birthday. The Standard RBL is not discounted.

  • The current Transitional Lump Sum RBL is calculated as:
    Original Lump Sum TRBL X current flat dollar lump sum RBL / $400,000

  • The current Transitional Pension RBL is calculated as:
    Original Pension TRBL X current flat dollar pension RBL / $800,000

Capital Value of a pension payable for life (RBL purposes)

The RBL amount of a pension payable for life is determined as the lump sum equivalent determined in accordance with the formula in ITAA36 sec 140ZO(1) i.e.

       Capital Value = (Annual Value x PVF) - UPP + RCV

where:
Annual Value is the first regular payment times by the number of possible payments within 12 months of the pension commencing.
PVF is the pension valuation factor from SISR Sch 1B.
UPP is the undeducted purchase price of the pension reduced by the CGT exempt component.
RCV is the present value of the residual capital value (if any) of the pension.

Schedule 1B - Pension Valuation Factors

  1. The pension valuation factor for:
    1. a pension that is to be indexed at a rate greater than 8% each year; or
    2. a pension that is included in a class of pensions that are to be indexed at a rate that is greater than 8% each year.
    is the factor determined in writing by APRA, on a case-by-case basis, in relation to that pension or class of pensions.

  2. The pension valuation factor for any other pension is the factor applicable to the pension under the following tables.

  3. A reference in the tables to "Age" is a reference to the age of the recipient on the commencement day of the relevant pension. If the age of a person on that day falls between 2 of the ages specified in a table, the pension valuation factor is to be determined by reference to the factors specified under the next greater age group in the table.

  4. If a pension has no reversion, the pension valuation factor for the pension is to be the relevant factor specified in the relevant table in the "Below 50% group.

  5. If the rules of a superannuation fund provide that a pension is indexed to movements in salary, the pension valuation factor for the pension is the relevant factor specified in the table relating to an indexation rate of 8%.

  6. If a pension is indexed by reference to movements in a price index published by the Australian Statistician, the pension valuation factor for the pension is the relevant factor applicable under the table into which the standard indexation rate falls.

  7. Subject to clause 8, if the governing rules of a superannuation fund provide for a pension to be indexed at the discretion of the trustees of the fund, the pension valuation factor is to be determined as if the indexation rate were a rate worked out by:

    1. adding together the indexation rates determined by the trustees for pensions of same kind as that pension in respect of each year in the period of 5 years of which the year of income in which the pension commences to be paid is the last year; and

    2. dividing the result by 5.

  8. If a superannuation fund to which clause 7 applies has been in existence, or making pension payments, for less than a continuous period of 5 years, the pension valuation factor is to be the relevant factor specified in the table that relates to the standard indexation rate.

Tables

Indexation rate of 8%    (Use for AWI/AWOTE indexation)
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
33
31
29
27
25
23
21
18
16
14
12
10
9
9
50% to 75%
34
33
31
29
27
25
22
20
18
15
13
11
10
9
Above 75%
35
34
32
30
28
26
24
21
19
16
14
12
10
10

Indexation rate of at least 7% but less than 8%    (use for CPI indexation)
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
26
25
24
23
21
20
18
16
14
13
11
10
9
8
50% to 75%
27
26
25
24
23
21
19
18
16
14
12
10
9
9
Above 75%
28
27
26
25
24
22
20
19
17
15
13
11
10
9

Indexation rate of at least 6% but less than 7%
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
22
21
20
19
18
17
16
14
13
12
10
9
8
8
50% to 75%
22
22
21
20
19
18
17
16
14
13
11
10
9
8
Above 75%
23
22
22
21
20
19
18
16
15
13
12
10
9
8

Indexation rate of at least 5% but less than 6%
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
18
18
17
17
16
15
14
13
12
11
10
9
8
8
50% to 75%
19
18
18
17
17
16
15
14
13
12
10
9
8
8
Above 75%
19
19
18
18
17
17
16
15
13
12
11
9
8
8

Indexation rate of at least 4% but less than 5%
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
16
15
15
15
14
13
13
12
11
10
9
8
8
7
50% to 75%
16
16
15
15
15
14
13
13
12
11
10
9
8
7
Above 75%
16
16
16
15
15
15
14
13
12
11
10
9
8
7

Indexation rate of at least 3% but less than 4%
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
14
14
13
13
13
12
11
11
10
9
8
8
7
7
50% to 75%
14
14
14
13
13
13
12
11
11
10
9
8
7
7
Above 75%
14
14
14
14
13
13
12
12
11
10
9
8
8
7

Indexation rate of at least 2% but less than 3%
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
12
12
12
12
11
11
10
10
9
9
8
7
7
7
50% to 75%
12
12
12
12
12
11
11
10
10
9
8
8
7
7
Above 75%
12
12
12
12
12
12
11
11
10
9
9
8
7
7

Indexation rate of at least 1% but less than 2%
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
11
11
11
11
10
10
10
10
9
8
7
7
7
6
50% to 75%
11
11
11
11
11
10
10
10
9
8
8
7
7
6
Above 75%
11
11
11
11
11
10
10
10
9
9
8
7
7
6

Indexation rate less than 1%
Reversion
Age next birthday of recipient on commencement day of pension
20 or less
21 to 25
26 to 30
31 to 35
36 to 40
41 to 45
46 to 50
51 to 55
56 to 60
61 to 65
66 to 70
71 to 75
76 to 80
81 or more
Below 50%
10
10
10
10
9
9
9
8
8
8
7
7
6
6
50% to 75%
10
10
10
10
10
9
9
9
8
8
7
7
6
6
Above 75%
10
10
10
10
10
10
9
9
9
8
8
7
7
6

Term Pension RBL Value

  1. The capital value of a fixed term pension which is purchased is calculated using the method set out in Taxation Determination TD 2000/29. A pension is regarded as purchased where the rules providing for the pension are based on an identifiable lump sum amount or amount available in the member's account, for example an allocated pension.

  2. The capital value of a fixed term pension other than a purchased pension is calculated using the method given in paragraph 4.

  3. Under subsection 140ZO(2) of the Income Tax Assessment Act 1936, the Commissioner must determine in writing a method for calculating the capital value of a superannuation pension that is not payable for life. Pensions payable for a fixed term, including pensions which satisfy the standards of subregulation 1.06(7) of the Superannuation Industry (Supervision) Regulations, come within subsection 140ZO(2).

  4. The capital value of a fixed term pension other than a purchased pension is calculated using the following formula:

           Capital Value = (Annual Value x PVF) - UPP + RCV

    where:

    Annual Value is the amount worked out by multiplying:

    1. the greatest number of payments of the pension that could be made in respect of the 12 month period beginning on the commencement day of pension, by
    2. the amount of the first regular payment of the pension.

    PVF is the pension valuation factor set out in the Table of Pension Valuation Factors for Fixed Term Pensions (below).
    UPP is the undeducted purchase price of the pension as defined in subsection 140ZO(1).
    RCV is the present value of the residual future capital value of the pension calculated by using the formula:

           Residual Capital Value = A / (1.1)^n

    where:

    • A is the residual capital value of the pension. This is the dollar amount the fund expects will be paid as a lump sum after a fixed term of n years.
    • n is the number of years, or parts of a year, between the commencement day of the pension and the payment of the residual capital value.

  5. The capital value calculated in paragraph 4 is used to determine whether a fixed term pension paid to a person is within the person's lump sum or pension reasonable benefit limits (RBLs), as appropriate.

  6. Where the indexation rate or the term of the pension lies outside the range of values specified in the Table of Pension Valuation Factors attached, full details surrounding the particular fixed term pension should be provided to the ATO in order to determine the relevant valuation factor.

    Example

    Mark has decided to retire and take a fixed term pension. The pension is for a term of 20 years and will be indexed at 5% pa. The first regular monthly payment of the pension will be $1,200 and will be paid on the first of each month. The annual value of the pension is $1,200 x 12 = $14,400. It has an undeducted purchase price of $80,000. There is no residual capital value.

    For the purposes of applying the RBLs, the capital value of the pension is calculated as:

           Capital Value = ($14,400 x 12.77) - $80,000 + $0
              = $103,888

 

Table of Pension Valuation Factors for Fixed Term Pensions

Pension Term
Indexation Rate
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%
1 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
2 1.82 1.84 1.85 1.87 1.89 1.91 1.92 1.94 1.96
3 2.61 2.64 2.68 2.72 2.75 2.79 2.83 2.87 2.91
4 3.33 3.38 3.44 3.50 3.57 3.63 3.70 3.77 3.85
5 3.98 4.06 4.15 4.24 4.34 4.44 4.54 4.65 4.76
6 4.57 4.68 4.81 4.93 5.06 5.20 5.35 5.50 5.66
7 5.11 5.26 5.41 5.58 5.75 5.93 6.12 6.32 6.54
8 5.60 5.78 5.97 6.18 6.39 6.62 6.87 7.12 7.40
9 6.04 6.26 6.49 6.74 7.00 7.28 7.58 7.90 8.24
10 6.45 6.70 6.98 7.27 7.58 7.91 8.27 8.66 9.07
11 6.81 7.11 7.42 7.76 8.12 8.51 8.93 9.39 9.88
12 7.15 7.48 7.83 8.22 8.63 9.08 9.57 10.10 10.68
13 7.45 7.82 8.22 8.65 9.12 9.63 10.18 10.79 11.46
14 7.73 8.13 8.57 9.05 9.57 10.14 10.77 11.46 12.23
15 7.98 8.42 8.90 9.42 10.00 10.64 11.34 12.12 12.98
16 8.21 8.68 9.20 9.77 10.41 11.11 11.88 12.75 13.71
17 8.42 8.92 9.48 10.10 10.79 11.55 12.41 13.36 14.43
18 8.60 9.14 9.74 10.41 11.15 11.98 12.91 13.96 15.14
19 8.78 9.35 9.98 10.69 11.49 12.38 13.39 14.54 15.83
20 8.93 9.53 10.21 10.96 11.81 12.77 13.86 15.10 16.51
21 9.07 9.70 10.41 11.21 12.11 13.14 14.31 15.65 17.18
22 9.20 9.86 10.60 11.44 12.40 13.49 14.74 16.17 17.83
23 9.32 10.01 10.78 11.66 12.67 13.82 15.15 16.69 18.47
24 9.43 10.14 10.94 11.87 12.92 14.14 15.55 17.19 19.10
25 9.52 10.26 11.10 12.06 13.16 14.44 15.93 17.67 19.72
26 9.61 10.37 11.24 12.24 13.39 14.73 16.30 18.14 20.32
27 9.69 10.47 11.37 12.40 13.60 15.01 16.65 18.60 20.91
28 9.76 10.56 11.49 12.56 13.80 15.27 16.99 19.04 21.49
29 9.83 10.65 11.60 12.70 13.99 15.52 17.32 19.47 22.06
30 9.89 10.73 11.70 12.84 14.17 15.75 17.64 19.89 22.62

 

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