DEPARTMENT OF TREASURY AND FINANCE November 2013 NTGPASS Member Information Session Understanding your NTGPASS Benefit and Preparing for Retirement Presented by NT Superannuation Office

2 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Disclaimer 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.

3 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Agenda  Your Active Member benefit  Investment options  NTGPASS benefits  Contributions  When and how you can access your super  Benefit options and tax  Opting out (transition to retirement)  Financial planning

4 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Your Superannuation Benefit Total benefit (Active members) Your accumulation accoun t NTGPASS employer benefit NTSSS employer benefit

5 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Defined benefit vs. accumulation account ….. your superannuation exposure to investment markets NTGPASS Active members Approximately (will be different for all members): 3/4 guaranteed by NT Government; 1/4 influenced by investment returns (positive or negative) NTGPASS retained & pension members, Choice of Fund All influenced by investment returns (can be positive or negative)

6 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Your investment options (accumulation account) Long term expectations Higher expected return Lower expected return 1 in 7 yrs 1 in 4.5 yrs1 in 4 yrs 1 in 3.5 yrs 1 in 3 yrs Higher RiskLower Risk Expected returns Chance of a negative return 6.5 Low website

7 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au NTGPASS & NTSSS benefits NTGPASS employer benefit = 2.5% x benefit points x benefit salary NTSSS = 3% x final salary x years of eligible service since 1 Oct 1988 Benefit salary = average of last 3 contribution salaries recorded on the review date of 1 October. Contribution salary is your full time equivalent salary plus approved allowances. These amounts can be obtained from your current member statement or contact the Super Office for a benefit estimate Accumulation Account = sum of member contributions, rollovers and investment earnings. Contributions include compulsory, voluntary and salary sacrifice.

8 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au What else affects your benefit Leave without pay Effects vary, depending on length of period and reason for leave. Long service leave NTGPASS & NTSSS not affected – continue to contribute. Recreation leave at half pay NTGPASS not affected – continue to contribute at full rate. NTSSS – only half of period considered eligible service. Part time Does not affect benefits already accumulated. May affect NTGPASS going forward. Will affect NTSSS and NTGDIS. Fact sheet available on our website

9 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Death and Invalidity Benefits Eligible NTGPASS members have an additional amount payable in the event of death or total & permanent disability (TPD). only applies while you are an active member cover reduces from age 50 to 59 members aged 60 and over are not eligible offset by workers compensation benefits apply during leave without pay lump sum benefit death benefit only paid if you have dependants Additional employer component = 17.5% x benefit salary x yrs foregone service fact sheets available on our website

10 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Contributions Concessional (pre-tax) contributions salary sacrifice employer (notional for NTGPASS) $25,000 yearly cap ($35,000 if over 60) Non-concessional (post tax) contributions compulsory NTGPASS voluntary (personal or spouse) $150,000 yearly cap (or $450,000 over 3 years) Tax penalties apply for exceeding caps

11 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au When can I access my benefit?  Since 1 July 1999, all contributions, investment earnings and employer monies are preserved until a condition of release is met.  Common conditions of release = retirement or transitioning to retirement. Preservation age must be met in both cases.  Preservation age depending on date of birth.  Early release provisions do not apply to Active Members (i.e. financial hardship/compassionate grounds).  Non preserved amounts (contributions made before 1 July 1999 or rolled in amounts) generally can only be accessed on cessation of employment. Your statement shows your gross preserved and non preserved components.

12 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Claiming your NTGPASS benefit NTGPASS Benefit Application Forms. Certified ID - make sure your documentation includes your current residential address e.g. your current driver’s licence (both sides required). TFN required. Ensure you return workplace security items. Payroll will process your final entitlements and provide us with required report. Timeframes – allow up to 30 days after ALL required paperwork has been received.

13 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Benefit Options Option 1 - leave your money in an NTGPASS retained account Option 2 - roll your funds into another superannuation fund Option 3 - take a lump sum –don’t forget to sign the retirement declaration. Option 4 - commence an NTGPASS pension Or - a combination of the above Seek professional financial planning advice!

14 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Lump Sum Tax/thresholds AGE 55-59AGE 60+ Tax Free Component Non-concessional contributions, Crystallised Pre July 1983 component 0% Taxable Component Taxed Salary sacrifice contributions, Investment earnings 0% to $180,000* 16.5% on excess 0% Untaxed Territory-financed benefit (employer component) 16.5% to $180,000* 31.5% on excess up to $1.315M 46.5% over $1.315M 16.5% up to $1.315M 46.5% over $1.315M All untaxed components are subject to at least 15% tax when claiming your benefit, regardless of age or payment option. *the $180,000 low rate cap is a lifetime cap

15 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Opting out of NTGPASS/NTSSS Active members who have reached preservation age can opt out of the NTGPASS. Opting out means you:  are no longer an active member of NTGPASS or NTSSS  move to an accumulation only super account The decision to opt out is irreversible  superannuation guarantee contributions (currently 9.25%) paid to a fund of your choice (can’t be NTGPASS)  cannot access lump sums except in limited circumstances  can transition to retirement  have a death and invalidity benefit from NTGDIS (subject to eligibility)

16 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au The purpose of 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 tax exempt  other personal reasons By transitioning to retirement, you can continue to work while simultaneously receiving a TTR pension from your super fund. Date of birthPres. age Before 1/7/6055 1/7/60–30/6/6156 1/7/61-30/6/6257 1/7/62-30/6/6358 1/7/63-30/6/6459 After 30/6/6460 Preservation Ages

17 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Estimated average retirement income SINGLE COUPLE ModestComfortableModestComfortable Weekly$442$802$635$1097 Yearly$23 032$41 830$33 120$ Age pension $ $ Sources: ASFA Retirement Standard – September Quarter 2013 Centrelink Guide to Australian Government Payments – 20/9/13 to 31/12/13

18 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au The importance of financial advice  Seek financial advice – from several sources if possible  “Getting Advice” –  Referral from friends/family  Financial Planning Association (FPA)  What do they charge and how do they get paid?  Adviser must have Australian Financial Services (AFS) licence  Centrelink Financial Information Service is also available If in doubt, seek other professional opinions

19 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Useful resources Take responsibility for your financial future and reap the rewards. NT Super - ASIC - ASFA Magazines, books, etc. And countless others.