Income Tax Assessment Regulations 1997
METHOD OF WORKING OUT AMOUNT OF NOTIONAL TAXED CONTRIBUTIONSPART 1 - PRELIMINARY SECTION 1.3 1.3
An actuary must not certify a category of membership to be a benefit category unless the actuary is satisfied that:
(a) each hypothetical new entrant to the benefit category with the same entry age would accrue retirement benefits on substantially the same basis; or
(b) if any 2 hypothetical new entrants to the benefit category accrued retirement benefits on a different basis, the new entrant rates for each member calculated under Parts 2 and 3 would be equal.
A defined benefit fund provides a benefit accrual of 10% plus twice member contribution rate of final average salary for each year of membership. Members can contribute at either 4% or 6% of salary. Member A contributes at 4% and member B contributes at 6%. An actuary must not certify that A and B are in the same benefit category unless the new entrant rates, as calculated under this Schedule, for members who contribute at 4% and 6%, are equal.
A member would not be expected to move from one benefit category to another unless 1 of the following relevant external events occurs:
Example for paragraph (d)
If the new entrant rates calculated for members with different member contribution rates are not equal, and, as a result, there are a number of benefit categories corresponding to the different member contribution rates, then a change in contribution rate would result in a move between benefit categories
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