The new life tables (Australian Life Tables 2000 -2002) are used to calculate allocated pension payment factors based on the life expectancy numbers, started the 1st of January 2006, replacing the old tables from 1992. The old tables were calculated with the projection of the pension ceasing at the age of 80.
The following tables illustrate the differences in calculating the Pension Valuation Factors using old and new Pension Valuation Factors:
Pension Start Date: 01/07/2005
Pension Balance Amount: $500,000
| NEW TABLE | |||
| Age | 55 | 60 | 65 |
| Min Amount | $23,697 | $25,907 | $28,902 |
| Max Amount | $43,478 | $45,872 | $50,505 |
| OLD TABLE | |||
| Age | 55 | 60 | 65 |
| Min Amount | $25,253 | $28,090 | $31,847 |
| Max Amount | $52,083 | $55,556 | $61,728 |
The new table allows allocated pensions to extend the pension term, so that payments can continue until the member reaches the age of 100. You can find out more about allocated pensions and road test SuperEasy Allocated Pension Calculator by selecting "Pensions" from www.supereasy.com.au.
Last month, the Australian Securities and Investments Commission (ASIC) launched a new allocated pension calculator that allows consumers, not only to calculate minimum and maximum pension amounts, but the calculator also facilitates comparison of products available on the market. The calculator should help consumers see how different product fees and charges might affect their pension income payments they would receive during retirement.
The calculator, in Excel spreadsheet format, supports different investment options, fees including contribution, management and adviser, and can be downloaded from the following link: Allocated Pension Calculator
