Income Tax Act, 1962 (Act No. 58 of 1962)RegulationsRegulations 2016Regulations in terms of paragraph 12D(5)(a) of Seventh Schedule to the Income Tax Act, 1962, on Determination of Fund Member Category Factor4. Determination of defined benefit component factor |
| (1) | The defined benefit component factor in respect of a defined benefit component must be determined in accordance with the formula— |
in which formula—
| (a) | 'X' represents the defined benefit component factor to be determined; |
| (b) | 'A' represents the annuity accrual rate; |
| (c) | 'B' represents the number that must be obtained— |
| (i) | by establishing a number in terms of the following formula |
in which formula—
| (a) | 'Y' represents the number to be determined; |
| (b) | 'E' represents the number 65; |
| (c) | 'F' represents the earliest age at which members of that fund member category may retire without any retirement benefit being reduced as a result of that retirement in terms of the rules of the fund; |
| (ii) | by utilising the factor in the column in Schedule I entitled "factor" that corresponds with the number determined in terms of paragraph (i) in the column "midpoint between 65 and earliest age of unreduced benefits" in that schedule. |
| (d) | 'C' represents the lump sum accrual rate; and |
| (e) | 'D' represents the number 0.8. |
| (2) | If a fund member is entitled to receive more than one defined benefit component in respect of a fund member category— |
| (a) | the fund must calculate a defined benefit component factor in respect of each defined benefit component; and |
| (b) | the defined benefit component factor for the purposes of this regulation is the sum of the factors calculated in terms of paragraph (a) less any defined benefit component factors used to calculate an underpin component factor in terms of regulation 5. |