General advice warning
The schemes administered by Super SA are exempt public sector schemes and therefore we are not required to hold an Australian Financial Services licence to provide advice on our products. The information given in this presentation by Super SA is of a general nature only and has been prepared without taking into account your individual objectives, financial situation or needs. Super SA strongly recommends that you refer to the relevant Product Disclosure Statement (PDS) and seek independent financial advice before making any financial decisions.
About Super SA
As the SA public sector super provider, Super SA is not for profit.
That means we’re here solely for the benefit of our members. You!
– Only run to benefit our members
– Exclusive to SA public sector employees – More than 209,000 members
– Aggregate account balances exceeding $21 billion*.
About the Lump Sum Scheme
All about the Lump Sum Scheme
– Established under the Superannuation Act 1988 – Closed to new members on 3 May 1994
– Hybrid scheme (part accumulation, part defined benefit)
– Basic entitlement is a refund of the member’s contributions with
investment returns plus a defined multiple of final salary
Your entitlement
On retirement from age 55
Member Account plus:
– Employer component based on Entitlements Superannuation Salary (ESS)
(annual full-time equivalent)
– PSESS Account (if any) – Rollover Account (if any)
– Co-contribution Account plus Salary Sacrifice Account
Your entitlement
The definition for Entitlements Superannuation Salary (ESS)*
– Full-time employees – Part-time employees
– Higher duties / some allowances
– Section 4(4) Salary – (reduction of classification)† – 5 year fixed term appointment – fact sheet on website.
* Some exceptions (agencies and executives).
† Must be made at the time of reduction in salary.
Your entitlement
Example of entitlement:
Member Account $45,000
Employer component 2.00 x ESS (annual full-time equivalent) Gross fortnightly salary $1,750
Your entitlement
Example of entitlement:
Your entitlement
Example of entitlement:
Total gross lump sum entitlement =
Member Account $ 45,000
+ Employer component $ 91,291
+ PSESS Account $ 17,000
Total gross entitlement $153,291
Investment Choice
Options:
– High Growth
Investment Choice
Super is a long-term investment and one of the keys to a
comfortable retirement lifestyle
– Switch investment options at any time – One switch per financial year is free – Additional switches are $20
– Unit price at time of switch is subject to change
– Read the “Investment” fact sheet and gain clarification before making
investment choices
– Read the Member Declaration on “Investment Choice” form thoroughly
Transition to Retirement
Transition to Retirement
– Long service leave can be taken on a single day basis even over an
ongoing period of time as a means of phasing into retirement*
– This has no impact on your super.
Transition to Retirement
Transition to Retirement
– Employees who enter into a transition to retirement employment
arrangement with their employer are able to access part of their accrued super as they reduce their hours of employment*
– Any super accessed before full retirement must be taken as an income
stream (no lump sums).
Early Access to Super
Who’s eligible for a Super SA Income Stream?
– Members must have a balance of $30,000 or more
– Members must have reached their Commonwealth Government
preservation age
– Triple S members do not need to reduce their hours or enter into a
Transition to Retirement (TTR) agreement with their agency
– Early Access benefit must be at least $30,000
– No more than one Early Access payment being taken out in any 12
Growing Super
Lump Sum Scheme members can salary sacrifice into Triple S
– Must maintain standard contributions from after-tax salary – Salary sacrifice contributions will be paid into Triple S – Members have investment choice in Triple S
– Administration fee deducted weekly from Triple S
Growing Super
Salary sacrifice means contributing from before-tax income
– Sacrifice up to 100% of salary under an arrangement * – Any percentage over 50% must be sacrificed to super – Salary sacrifice into Triple S – through payroll
Taxation
Taxation on entitlements
– Super SA – untaxed schemes
– Refer to “Tax” fact sheet on website.
Visit the
Taxation
Lump sum divided into three components based on member’s
continuous service in SA public sector:
– Tax free
(includes non-concessional contributions since 1/7/83 and pre 83 amounts)
– Taxable (untaxed)
Taxation
Commonwealth Government preservation age
Date of Birth Commonwealth
Taxation
Taxation on entitlements
Under
Commonwealth
Preservation Age
Taxed – 20%
Untaxed – 30%*
Commonwealth
Preservation Age
-59
Up to $195,000
Taxed - 0%
Untaxed – 15%*
Over $195,000
Taxed – 15%
Untaxed – 30%*
60+
Taxed – 0%
Untaxed – 15%*
* Subject to $1,395,000 untaxed cap
+ 2% Medicare Levy if paid as a
lump sum
Taxation
Taxation on a lump sum – example
Assumptions:
– William is aged over Commonwealth Government preservation age – William retires during the current financial year
– Total lump sum entitlement is $150,000
(including non-concessional contributions $35,000)
Taxation
Taxation on a lump sum – example
Tax free component:
– Non-concessional contributions (since 1983) • $35,000
Taxation
Taxation on a lump sum – example
– Total – Tax free = Taxable (untaxed) • $150,000 - $85,000 = $65,000
– As this is under the threshold limit of $195,000 the Taxable (untaxed)
amount is taxed at 17% (see the Tax Fact Sheet for more information)
– $11,050 total tax deducted by Super SA – Net cheque of $138,950 paid to member
– Or net amount of $140,250 if member is rolling over to Super SA Income
Taxation
Taxation on a lump sum – example
Taxation
Taxation on a lump sum – example
– Total – Tax free = Taxable (untaxed) • $150,000 - $35,000= $115,000
– As this is under the threshold limit of $195,000 the Taxable (untaxed)
amount is taxed at 17% (see the Tax Fact Sheet for more information)
– $19,550 total tax deducted by Super SA – Net cheque of $130,450 paid to member
– Or net amount of $132,750 if member is rolling over to
Taxation
Rollover portability
If you roll over a lump sum to another complying super fund, the fund will deduct 15% contributions tax on arrival.
Taxation
Untaxed cap
– If the Taxable (untaxed) amount paid is greater than $1,395,000 the excess
will be taxed at the top marginal rate.
– This applies to the taxable component and not the total payment.
Proportioning
– The tax components for all partial payments must contain the tax
Options
Members of a Super SA scheme can access:
– Super SA Income Stream
Important points to consider
Retirement from age 55 onwards:
– Recommend that you seek financial advice
– Provide Super SA with your Tax File Number (TFN) prior to retirement – You must claim your entitlement from Super SA
– You must not recommence employment with the SA public sector within
one month of resignation date
– List your super in your Will. In the event of death, super is paid out to the
spouse/putative spouse including same sex partner (if any), or Estate
Industry Fund Services (IFS)
The financial planners at IFS can advise you about the
options available to SA public sector employees.
The initial meeting is free and if you decide not to proceed with a plan there’s no cost. No advice is given at your first meeting as it’s a fact-finding appointment. Services include:
• Fixed up front fee for service • Flexible payment options
• Can deduct fee from your Triple S or
Industry Fund Services (IFS)
Can help you with a wide range of topics:
– Super and retirement planning – Centrelink benefits
– Investment strategies and wealth creation – Taxation and Estate planning.
Any Questions?
You might be interested in attending one of these seminars:
– Post Retirement Products – Early Access to Super
– Targeted Voluntary Separation Package.
