A term of life income stream is valued on life expectancy (commutation factor)Not exactly...
The value of the total taxable amount within a defined benefit scheme, for the purposes of the new tax plan, is calculated ( my understanding ) on the expectation of total payments made to the person over the term of their natural life.
No one can accurately estimate this of course, so, again from my understanding, they use the average lifespan - different for male and female.
Mathematically, ( men and women )
assessable amount = lifespan ( years ) x yearly payments
therefore, a woman can potentially go over the $3M, and yet, her annual pension could be less than a male. She is expected to live longer.
To be more blunt, consider a male and female public servant, same wage, same defined benefit plan. They both retire at the same time. In theory, through my understanding, the woman could be subject to a greater tax burden, purely because she is expected to live longer.
This is how one public servant I know, still employed, explained it.
I actually know quite a few female public servants. One about to retire at 65. I know she will get tax advice of course, so this is for my own curiosity. I am certain she will be subject to this effect though but as its personal I dont want to pry with her.
FWIW - I have my own defined benefit, but it's very different to that of a public servant. My own value will be known beforehand so I can manage my retirement and rollover amount as i see fit. but a female public servant can not because her benefit is based on a payout expectancy. The public service defined benefit scheme works differently than any other super, and if I am honest, it is obscenely generous. The people I know are all pre-jeff kennet who changed these benefits, so their schemes are full up with benefits. Later public servants dont get these extras...
Table of Life Expectancy for Income Streams with a Commencement Day on or after 01/01/2015
Last amended: 15 December 2009 How to use life expectancy tables The following table shows how to select and use the appropriate life expectancy table in the assessment of an income stream. Step Action 1 Determine the commencement day of the income stream to be assessed and ensure that the...
clik.dva.gov.au
Using the Defence Fund, those factors are 19.22 for men and 22.05 for women at age 65, Representing a yearly payment of $156k for men and $136k for females to exceed $3million.
So while it is in Accumulation phase, women would be subject to a lower salary threshold than men, simply because the present value of a $100 guaranteed for life is more for a woman than a man.
Back to your original statement, yes men and women are treated differently.
But in this particular benefit design, the member doesn't even notionally earn interest or income for an additional taxable component!