Pension Valuation Factors for Defined Benefit Income Streams
Last amended: 13 May 2008
Description of pension valuation factors
The pension valuation factor used depends on the:
- indexation rate of the defined benefit income stream, and
- age of the pensioner.
The indexation rates range from less than 1% to 8%. The pension valuation factors reduce as the age of the pensioner increases. Each factor covers an age range of 5 years:
- starting at 20 years of age or less, and
- finishing at the age ranges 96 to 100, and 100+.
Use of pension valuation factors
Pension valuation factors are used to determine the asset value of asset tested defined benefit income streams. However, under Commission determinations 10, 11 and 12 of 1998 and 5 and 6 of 1999, all defined benefit income streams are asset test exempt.
How to use the pension valuation factors
The following table shows how to select the appropriate indexation rate column from the pension valuation factor table.
Note: Where the income stream is indexed at greater than 8% each year, the pension valuation factor will be determined by the Secretary of FaHCSIA.
|
If the income stream is indexed... |
Then the pension valuation factor will be... |
|
to movements in salary |
listed in the 7% but less than 8% column of the following table. |
|
to movements in a price index published by the Australian Government Statistician |
listed in the 6% but less than 7% column of the following table. |
|
at discretion of trustees of a super fund which has been in existence or has been making payments for less than a continuous period of five years |
listed in the 6% but less than 7% column of the following table. |
|
at discretion of the trustees of a super fund which has been in existence or has been making payments for more than a continuous period of five years |
calculated by first adding together the indexation factors declared by the trustees over the past five years and then dividing the result by five to get the five year average. The relevant pension valuation factor will be listed in the column which corresponds to the five year average. |
Pension valuation factor table
The following table shows the pension valuation factors for pensioners according to their age next birthday and the indexation rate for a pensioner's income stream.
|
Age |
Indexation rate for person's income stream |
||||||||
|
8% |
7% but less than 8% |
6% but less than 7% |
5% but less than 6% |
4% but less than 5% |
3% but less than 4% |
2% but less than 3% |
1% but less than 2% |
Less than 1% |
|
|
20 or less |
34 |
27 |
22 |
19 |
16 |
14 |
12 |
11 |
10 |
|
21-25 |
32 |
26 |
22 |
18 |
16 |
14 |
12 |
11 |
10 |
|
26-30 |
30 |
25 |
21 |
18 |
16 |
14 |
12 |
11 |
10 |
|
31-35 |
28 |
23 |
20 |
17 |
15 |
13 |
12 |
11 |
10 |
|
36-40 |
26 |
22 |
19 |
16 |
14 |
13 |
11 |
10 |
9 |
|
41-45 |
23 |
20 |
17 |
15 |
14 |
12 |
11 |
10 |
9 |
|
46-50 |
20 |
18 |
16 |
14 |
13 |
11 |
10 |
9 |
9 |
|
51-55 |
18 |
16 |
14 |
13 |
12 |
11 |
10 |
9 |
8 |
|
56-60 |
15 |
14 |
12 |
11 |
10 |
10 |
9 |
8 |
8 |
|
61-65 |
12 |
11 |
11 |
10 |
9 |
8 |
8 |
7 |
7 |
|
66-70 |
10 |
9 |
9 |
8 |
8 |
7 |
7 |
6 |
6 |
|
71-75 |
8 |
7 |
7 |
7 |
6 |
6 |
6 |
5 |
5 |
|
76-80 |
6 |
6 |
5 |
5 |
5 |
5 |
4 |
4 |
4 |
|
81-85 |
4 |
4 |
4 |
4 |
4 |
4 |
3 |
3 |
3 |
|
86-90 |
3 |
3 |
3 |
3 |
3 |
3 |
3 |
2 |
2 |
|
91-95 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
|
96-100 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
2 |
|
101+ |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
1 |
Source URL: https://clik.dva.gov.au/compensation-and-support-policy-library/part-10-types-income-and-assets/105-income-streams/1057-life-expectancy-tables-pension-valuation-factors-and-payment-factors/pension-valuation-factors-defined-benefit-income-streams