DEPARTMENT OF TREASURY AND FINANCE November 2013 NTGPASS Pension Information Session 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  NTGPASS pensions  Transition to retirement (TTR)  How to commence a pension  Investment options  Centrelink Pension session

4 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au NTGPASS Pensions Two types available: standard or pre-retirement (TTR). Suitability will depend on your personal and work circumstances. 15% contributions tax deducted from untaxed components (active members only). Minimum initial balance $50,000. Pension payments are tax-free at age 60 and taxed concessionally between Pension session

5 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au NTGPASS Pensions  Greater investment choice.  Investment earnings are exempt from tax.  Lump sum withdrawals (conditions apply).  NTGPASS pensions are not lifetime guaranteed.  Paid to eligible reversionary beneficiary or to estate in the event of death.  Account-keeping fee $1.50 per week.  Fees apply for excess switches and withdrawals. Pension session

6 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Transition To Retirement (TTR) Why utilise a TTR strategy?  reduce working hours and still maintain level of income  salary sacrifice strategy  accessibility to additional income to repay debts  pension investment returns are tax exempt  other personal reasons The TTR process allows you to continue to work while simultaneously receiving a TTR pension from your super fund. Pension session

7 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Account-based pension vs TTR pension Rules applicable to both types of pension:  Minimum pension equal to 4% of the account balance (if aged 55-64).  Underlying investment earnings are tax exempt.  Pension receives income tax concessions between age  Pension PAYG tax free after age 60. Additional restrictions applicable to TTR pensions:  The pension must be non-commutable (no lump sum withdrawals).  Maximum annual pension equal to 10% of the account balance.  TTR pension converts to a standard pension at age 65. Pension session

8 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Preservation Ages Pension session Date of birthPreservation Age Before 1/7/ /7/60-30/6/6156 1/7/61-30/6/6257 1/7/62-30/6/6358 1/7/63-30/6/6459 After 1/7/196460

9 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Account-based pension taxation (55-59) employer contributions + salary sacrifice + investment returns voluntary contributions + NTGPASS compulsory Super account Taxable component Tax free component 70%30% $ $ 70% taxable, 30% tax free You Example only - tax circumstances will vary with each individual. Pension session

10 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Current Employment income$68,000$44,355$40,730 + Account-based Pension income18,000 - Tax (incl. Medicare)-14,670-10,915-5, % tax offset on Pension1,890Nil = Net Income$53,330 Notes and assumptions: Amounts rounded to nearest $5. Income tax rates for 2013/14 used and Medicare calculated at 1.5%. Initial pension balance comprised 30% tax free component, 70% taxable component. Pension payments not assessable for tax after age 60. TTR Example – reduction of hours/salary Pension session

11 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au How to Commence an NTGPASS Pension  Ensure all rollovers and contributions are made before commencing NTGPASS pension.  Complete appropriate forms and provide certified ID.  Tax File Number Declaration for members under age 60.  Pension accounts are created at the start of each month in line with monthly pension rates of return. Applications are generally processed within 30 days.  Selecting pension amount and payment frequencies. Effect of Public Holidays.  Providing incorrect details or incomplete paperwork may cause delays. Pension session

12 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Your investment options Pension session Website

13 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Pension Investments No default investment option. Pension rates of return are applied on a monthly basis. Investment switches are generally actioned in the first week of the month. First investment switch in a financial year free, subsequent switches charged $25 fee. 20% 50% 30% Pension session

14 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Which investment option is right for you? Do not base your decision on recent returns or market outlook! Some things to take into account: Personal circumstances: – Time until the money is required – Your other investments – Proportion of defined benefit Comfort with taking risk Pension session

15 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au NTGPASS Pensions & Centrelink Speak with a Financial Information Service (FIS) Officer at Centrelink on or visit NTGPASS pension account balance counts toward the Centrelink assets test. A portion of your pension payments will be assessed as income. NT Superannuation Office cannot provide advice on Centrelink support or any other aspect of your financial situation. Centrelink Income Schedules. Pension session

16 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au Taxation

17 DEPARTMENT OF TREASURY AND FINANCEwww.nt.gov.au What happens if… I want to add money to my pension account? I want to change my investments? I need a lump sum withdrawal? I want to change my pension amount? I want to change my reversionary nomination? I want to close my account? My money runs out? In the event of my death? Pension session