THE CORPORATIONS LAW

CHAPTER 2D - OFFICERS AND EMPLOYEES

PART 2D.2 - RESTRICTIONS ON INDEMNITIES, INSURANCE AND TERMINATION PAYMENTS

Division 2 - Termination payments

SECTION 200G   GENUINE PAYMENTS OF PENSION AND LUMP SUM  

200G(1)  [Exceptions]  

Subsection 200B(1) does not apply to a benefit if:

(a)  the benefit is a payment in connection with a person's retirement from a board or managerial office (the relevant office ) in a company or a related body corporate; and

(b)  the payment is for past services the person rendered to:

(i) the company; or

(ii) a related body corporate; or

(iii) a body that was a related body corporate of the company when the past services were rendered; and

(c)  the value of the benefit, when added to the value of all other payments (if any) already made or payable in connection with the person's retirement from board or managerial offices in the company and related bodies corporate does not exceed the payment limit set by subsection (1A).

In applying paragraph (c), disregard any pensions or lump sums that section 200F applies to.

200G(2)  [Calculation of payment limit]  

The payment limit is:

(a)  the amount worked out under subsection (3) if the person:

(i) was an eligible employee in relation to the company at the time when the person retired from the relevant office; and

(ii) has been an eligible employee in relation to the company throughout a period (the relevant period ), or throughout periods totalling a period (also the relevant period ), of more than 3 years; or

(b)  otherwise - the total remuneration of the person from the company and related bodies corporate during the period of 3 years ending when the person retired from the relevant office.

Note:

Section 9 defines remuneration .

200G(3)  [Formula]  

The amount worked out under this subsection is the amount worked out using the formula:

Total remuneration x Relevant period
------------------------------------
                 3 
      

where:

total remuneration is the amount of the total remuneration of the person from the company and related bodies corporate during the last 3 years of the relevant period.

relevant period is the number of years in the relevant period or 7, whichever is the lesser number.

200G(4)  [Amounts to be disregarded]  

In determining for the purposes of paragraph (1)(c) the value of a pension or lump sum payment, disregard any part of the pension or lump sum payment that is attributable to:

(a)  a contribution made by the person; or

(b)  a contribution made by a person other than:

(i) the company; or

(ii) a body corporate (a relevant body corporate ) that is a related body corporate of the company, or that was, when the contribution was made, such a related body corporate; or

(iii) an associate of the company, or of a relevant body corporate, in respect of:

(A) the payment of the pension, or the making of the lump sum payment, as the case may be; or

(B) the making of the contribution.

200G(5)  [Definition of eligible employee]  

For the purposes of subparagraph (2)(a), a person is taken to have been an eligible employee in relation to a company at a particular time if:

(a)  the person was a genuine full-time employee of the company at that time; or

(b)  the person was a genuine full-time employee of a body corporate at that time and the body corporate was related to the company at that time.

200G(6)  [Definition]  

In this section:

payment means a payment by way of pension or lump sum and includes a superannuation, retiring allowance, superannuation gratuity or similar payment.