Pension - Northern Territory Government

Document Sample
Pension - Northern Territory Government Powered By Docstoc

                    NTGPASS and the
                 NT Superannuation Office

October 2010


It is important that you read this Disclaimer before
considering any of the information contained within.
The information provided is general in nature and does
not take into account your personal circumstances,
financial needs or objectives. Before acting on any
information, you should consider the appropriateness of
it, having regard to your objectives, financial situation and
needs. In particular, you should seek independent
financial advice before acting on any of the information
contained within.

     Northern Territory Superannuation Office   2
      Presentation – 3 parts
Superannuation Office
    Members, benefits, products
    Security of your account
    Member information statements
    Proposed reforms
    Current superannuation environment
   Investment options recap


   Recent returns
   Making a choice
Superannuation Office
   Retirement planning

      Northern Territory Superannuation Office   3
                NTGPASS members

 Active            – 4,726 members. Have been in continuous NTPS
                     employment since before 10 August 1999. Contributing 2%
                     to 6% of salary.

 Retained          – 4,480 members. Have ceased NTPS employment and
                     chosen to retain part or all their super with NTGPASS.

 Spouse            – 49 members. Spouse of an active or retained member who
                     has opened an accumulation account with NTGPASS.

 Pension           – 68 members. Retained members who have used part or all
                     of their super account to commence an allocated pension.

  Only an active member has an employer-financed defined benefit

Member numbers as at 30 June 2010

              Northern Territory Superannuation Office   4
             Defined benefit vs accumulation account

        ….. your NTGPASS benefit exposure to investment markets
             Active members               Retained and pension

Approximately (will be different for all members):
• 3/4 guaranteed by NT Government;                     • All influenced by investment returns
                                                         (can be positive or negative)
• 1/4 influenced by investment returns (positive or

            Northern Territory Superannuation Office             5
         NTGPASS products

Member Investment Choice
Allows members to choose how to invest their accumulation account
from six investment options.

Investment Mixing
Provides flexibility in the way members can select investment options.

Allows members to take benefits in pension form.

Death and Invalidity cover
Free cover for active members up to age 60.

       Northern Territory Superannuation Office   6
       Investment choice and mixing
 choose one option for your current balance and
  (if you want) a different option for future contributions
 mix any of the options for your current balance
 specify the investment option pension payments are taken out of
2009-10 returns 1             Investment Option             Super         Pension
                              Managed Cash                  3.32%           3.46%
                              Conservative                  8.48%           8.88%
                              Cautious                     10.87%          11.10%
                              Growth                       12.89%          11.28%
                              Assertive                    13.17%          -3.75%
                              Aggressive                   13.90%          14.73%
                            Actual rate earned depends on the length of time in the option
                            Assertive pension option commenced March 2010

       Northern Territory Superannuation Office                           7
         NTGPASS pensions

A flexible, tax effective income stream for your retirement

 Became available April 2008

 Pension payments tax free after age 60

 Standard or Pre-retirement pensions available

 Member Investment Choice applies

 Pension investment income tax exempt

 Pension payments cease when account balance reduces to zero

        Northern Territory Superannuation Office   8
           Identity theft, fraud and scams

AML/CTF legislation introduced 2006
 designed to combat money laundering and terrorism financing activities

Many new responsibilities put on super funds, including:
 customer identification
 maintenance of records
 reporting suspicious transactions and activities to AUSTRAC

It pays to be wary of:
 securing mail and personal information
 phishing emails, ATM skimmers, PIN security
 companies offering early access to superannuation

         Northern Territory Superannuation Office   9
                  2010 Statements – Page 3

Accumulation Account Summary                                                          Defined Benefit as at 30 June 2010
Opening balance at 1 July 2009                                      $ 64 616.81
Plus:          member contributions                                   $ 4 143.60      NTGPASS
               voluntary contributions                                       $ 0.00   NTGPASS employer component                                $ 180 651.21
               salary sacrifice contributions                                $ 0.00
                                                                                      (2.5% × benefit points × benefit salary × vesting
               Commonwealth co-contributions                                 $ 0.00
               rollovers                                                     $ 0.00
               investment return                                      $ 2 051.58
Less:          contributions tax                                             $ 0.00
                                                                                      NTSSS benefit                                              $ 45 798.57
               family law accumulation account                               $ 0.00
               family law fee                                                $ 0.00   Surcharge
               investment switch fees                                    $ 25.00      Less superannuation surcharge debt account                     $ 0.00
Closing balance at 30 June 2010                                     $ 70 786.99       Your gross defined benefit at 30 June 2010                $ 226 449.78

                                       Total Benefit as at 30 June 2010
                             Your accumulation account                                                       $ 70 786.99
                             Your defined benefit                                                           $ 226 449.78
                             Your gross resignation benefit at 30 June 2010                                 $ 297 236.77

                             Note: the value of your benefit is before tax

                   Northern Territory Superannuation Office                                                               10
               Statements Page 4

Preservation Components
Tax Components of Resignation Benefit
Preserved amounts (contributions and investment earnings accrued from 1 July 1999) must
remain in a superannuation fund until you meet a condition of release e.g. age retirement or taxation
Your resignation benefit comprises three different tax components. Further information about
invalidity retirement. Generally, you can cash your gross non preserved component when you
is available on our website.
leave NTPS employment, however it may be subject to tax.
    Tax component                                             NTGPASS       NTSSS                  Total
                                                      Gross non        Gross
  Type of exit member contributions
    Tax free e.g.                                                  preserved $ 0.00
                                                      preserved 103.85
                                                             $ 53                         Total 103.85
                                                                                           $ 53

   Taxable (taxed) e.g. salary sacrifice and          $ 64 192.70   $ 233 044.07   $ 297 236.77
   investment earnings                                         $ 17 683.14    $ 0.00   $ 17 683.14
  Retrenchment                                        $ 64 192.70 $ 233 044.07 $ 297 236.77
   Taxable (untaxed) e.g. Territory-financed
   component                                                 $ 180 651.21   $ 45 798.57   $ 226 449.78

    Total benefit                                            $ 251 438.20   $ 45 798.57   $ 297 236.77

           Northern Territory Superannuation Office                         11
        Proposed NTGPASS reforms

Reforms approved by Cabinet, legislation to be amended this year and
changes commence early 2011.

1. NTGPASS Administration fee
2. Opt out of NTGPASS to enable transition to retirement
3. Merging of three trustee boards

Further changes will progress in 2011 to simplify the NTGPASS and
NTSSS schemes. Changes will not affect members’ benefits.

       Northern Territory Superannuation Office   12
        Proposed NTGPASS reforms

NTGPASS Administration fee
 From 2011, retained accounts will incur an account keeping fee
 Active members will not incur this fee
 New fee in line with industry funds
 Introduced to cover cost of increasing retained membership
 Pension fee will be increased to same as retained member
 No other fee changes

       Northern Territory Superannuation Office   13
          Proposed NTGPASS reforms

Transition to Retirement (TTR)
Commonwealth Government rules
 must have reached preservation age (currently 55)
 super must be taken as income stream (pension)
 cannot be taken as a lump sum

Additional proposed NTGPASS rules
 members can elect to ‘opt out’ of NTGPASS after preservation age
 must take both NTGPASS and NTSSS benefits (will no longer be an active member)
 treated as an exiting member, but can’t:
         – take any amount as a lump sum (unless over age 65)
         – claim the annuity bonus

          Northern Territory Superannuation Office       14
        Transition to retirement (TTR)

  Why utilise a TTR strategy?

     reduce working hours but maintain level of income
     salary sacrifice strategy
     extra income to repay debts
     pension investment earnings are tax exempt
     other personal reasons

Seek qualified financial advice before commencing TTR
Once you have opted out of NTGPASS, the decision is irrevocable

        Northern Territory Superannuation Office   15
          The current superannuation environment

2010 Budget proposals and changes
     Superannuation Guarantee increase
     Co-contribution changes
     Concessional contributions cap
     Pension drawdown relief extended
     Low income Government contribution

Commonwealth Reviews (Henry, Harmer, Cooper, Ripoll)
    some recommendations accepted prior to federal election
    Government not guaranteed to act on any recommendations
2010 election and resulting minority Government
    Previous proposals not guaranteed to proceed into legislation

        Northern Territory Superannuation Office   16

                     Retirement Planning

October 2010

                 How long does your money need to last?

               Twenty (plus) years is a long time to support yourself without salary

                   0                           16                       65    77yrs


                   0                            20                 60           83yrs


                             pre-work                    working life        retirement
Figures for an average male
Source: Australian Bureau of Statistics 1950 & 2009

                   Northern Territory Superannuation Office                 18
           Estimated average retirement income

Age pension                              $17 118                           $25 807

Sources:     Westpac - ASFA Retirement Living Standard – March Quarter 2010
             Centrelink Guide to Australian Government Payments – 20/9/10 – 31/12/10

           Northern Territory Superannuation Office                   19
      Make sure you have a plan
Failing to plan? You may be planning to fail.

 Educate yourself – arm yourself with knowledge

 Budget, budget, budget

 Set your goals and review them regularly
 Seek financial advice – from several sources if possible

 Ask lots of questions (of yourself, your adviser)

 Are you comfortable with the risk involved?

 Estate planning, insurance

         Don’t become complacent!

      Northern Territory Superannuation Office   20
       Doing your budget

• Illustrates where you need to spend less
  or focus on more
• Highlights your capacity to save
• Can provide you with an indication as to
  the income you may want in retirement
• Will act as a support document should
  you wish to see a financial adviser

        Northern Territory Superannuation Office   21
Free financial calculators

Northern Territory Superannuation Office   22
      Do your own analysis

60 year old couple, drawing $26,783 each ($53,565 p.a. combined income)
Require starting pension balances of $331,000 each ($662,000 total)
Based on many assumptions – take as a guide only

      Northern Territory Superannuation Office      23
      The importance of financial advice
Where do I find it and what questions do I ask?
 “Getting Advice” –

 Referral from friends/family

 Financial Planning Association (FPA)

 Remuneration (commissions or fee for service?)

 Adviser must have Australian financial services (AFS) licence

 Centrelink Financial Information Service is also available

     If in doubt, seek other professional opinions

      Northern Territory Superannuation Office   24
      Useful resources
Take responsibility for your financial future and reap the rewards.
    Magazines, books, etc.

  And countless others. Google is your friend!

       Northern Territory Superannuation Office   25

Northern Territory Superannuation Office   26

Shared By: