Another measure in the bill provides for a special relief mechanism for the calculation of tax payable on lump payments such as superannuation or pension benefits, spousal or taxable child support arrears.

retirement benefits (eg pensions and lump sum payments on retirement); and

As at 31 March 2011, the RMPP had approximately 436 000 members, of which approximately 130 000 were current employees accruing benefits in the scheme (active members), approximately 118 000 were former employees who had left service before retirement age and not yet drawn pension benefits (deferred members) and approximately 188 000 were pensioners.

The way in which this contribution was managed dissociated from the retirement benefits actually paid since 1997 confirms its flat-rate nature.

(d) "retirement benefits" means benefits paid by reference to reaching, or the expectation of reaching, retirement or, where they are supplementary to those benefits and provided on an ancillary basis, in the form of payments on death, disability, or cessation of employment or in the form of support payments or services in case of sickness, indigence or death. In order to facilitate financial security in retirement, these benefits usually take the form of payments for life. They may, however, also be payments made for a temporary period or as a lump sum.

On the other hand, private pension plans generally encourage full rather than partial retirement, since retirement benefits are typically based on annual average earnings averaged over the last three or five years of employment, and full retirement may be required for receipt of any retirement benefits.