No
The amount over $100,000 ( (2016 TBC figure) this year it’s $118,600) of an untaxed DB pension which is the case for former Fed Govt employees is taxed at marginal tax rate AND the 10% tax offset is removed. (The 10% is not a tax rate reduction)
So if you’re untaxed part is $200,000 you’re in the 47% tax bracket and no tax offset
For ease of calculation
While former PS receive different pensions it would appear around by age 60 around 30-40% of it is tax-free (your capital and tax paid employer contributions) this part is NOT INDEXED
THE remaining 60-70% is fully taxed at marginal rate but because it’s over $118,600 there is zero tax offset) if this amounts to $240,000 then you would also be receiving $$140,000 tax-free so a
total annual salary of $380,000 and a tax bill of $78,667.
So 20% of the total is tax. As compared to the 0% tax on private sector superannuation
TBC
IN THE private sector the TBC IS plus the 15% tax on annual earnings on amounts higher than $1,600,000 - since the equivalent is likely to be a notional total of $6 million. So $4.4 million earning 7% = $308,000 x 15% = $46,200
THATS $30,000 less
TSB
The extra tax to be paid by anyone would be $6m-$3m = $3m x 7% =. $210.000 x .15 = $31,500
This puts the former public servant paying 28.9% of their total package as tax ($110,000)
If they earnt this $380,000 as wages the tax is $149,200 39.2% of the total salary
Of the untaxed payment of $240,000 the total tax would be 45.83% (47% highest income tax rate plus the TSB tax)
Without the TSB the total tax would be 32.7% of the untaxed amount
This is important because this is the equivalent earnings as the tax-free payment is your own savings capital which we would NEVER tax