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Presentation to Presented by: Noel Hackett (QFA, MIB, Dip Invest) New Ireland Assurance Senior Presentation to Presented by: Noel Hackett (QFA, MIB, Dip Invest) New Ireland Assurance Senior Pensions Consultant Tel: 086 -8186163 Tony Delaney- Area Sales Manager New Ireland 12 -13 APRIL 2011

Benefits at Retirement § At retirement your benefits will come from: – State Pension Benefits at Retirement § At retirement your benefits will come from: – State Pension – NUIG Scheme – Personal Wealth / Savings 2

State Pension § From 2011 – Single Person € 230. 30 per week – State Pension § From 2011 – Single Person € 230. 30 per week – Married Couple € 383. 80 § Applies to all employees who joined since 1995 3

NUIG Scheme § Defined Benefit Basis § For employees joining after 1995 : – NUIG Scheme § Defined Benefit Basis § For employees joining after 1995 : – Pension Benefits based on Pensionable Salary – Salary less twice the OAP (In 2010 a deduction of € 23, 951) – Employees pay PRSI and qualify for OAP 4

NUIG Scheme § Normal Retirement Date – Pre 2004 employees – From age 60 NUIG Scheme § Normal Retirement Date – Pre 2004 employees – From age 60 – Post 2004 employees – From age 65 § 1/200 th pensionable service/pensionable remuneration to 3. 33 times State Pension (39, 918) Plus § 1/80 th x pensionable service/pensionable remuneration in excess of this limit(change to normal integration rules on 1/1/2004) § Pension of 1/80 th of Pensionable Salary per year of service, on integrated basis(less twice state) same for salary over € 39, 918 pa § Tax Free Lump Sum of 3/80 th of Salary 5

Example § Employee on a salary of € 50, 000 joined NUIG in 2000 Example § Employee on a salary of € 50, 000 joined NUIG in 2000 at age 30 § Service to age 65 is 35 years § Pensionable Salary is € 26, 049 (€ 50, 000 - € 23, 951) § Pension from 65 is 35/80 ths of € 26, 049 – € 11, 396 p. a. § Tax Free Lump Sum is 105/80 ths of € 50, 000 € 65, 625 6

Early Retirement § Was allowed but only as a deferred pension § Changes from Early Retirement § Was allowed but only as a deferred pension § Changes from 2004 – – – Existing employees from 50 New entrants from 55 Immediate pension payable Early payment reduction Change to normal integration from 1/1/2004 7

Bridging the Gap - 2 Options § Purchase of Notional Years of Service § Bridging the Gap - 2 Options § Purchase of Notional Years of Service § AVC Scheme 8

Notional Years § Employee can buy “notional years” § Defined Benefit basis § Must Notional Years § Employee can buy “notional years” § Defined Benefit basis § Must buy year with all the “trimmings” 9

Scope for AVCs § Will your benefits be on an integrated basis – i. Scope for AVCs § Will your benefits be on an integrated basis – i. e. joined after 1995 ? § Do you – Wish to retire early ? – Have short service ? – Want to provide a higher Spouses Pension 10

AVC Scheme § No promised benefits – will depend on – Investment Returns – AVC Scheme § No promised benefits – will depend on – Investment Returns – Annuity Rates – if pension bought at retirement § Can be more flexible than added years – – Select a monthly contribution Save for a specific benefit ARF option Lump Sum only 11

Additional Voluntary Contributions § Government incentive through: – Tax Relief – Generous contribution limits Additional Voluntary Contributions § Government incentive through: – Tax Relief – Generous contribution limits – ARF option – greater flexibility at retirement 12

How much can I Contribute ? Up to age 30 15% 30 to 39 How much can I Contribute ? Up to age 30 15% 30 to 39 20% 40 to 49 25% 50 to 54 30% 55 to 60 35% 60 and over 40% 13

USC for self assessed under age 70 the 2011 rates Part of aggregate income USC for self assessed under age 70 the 2011 rates Part of aggregate income Rate of USC First € 10, 030 Next € 5, 980 Next € 83, 984+ 2% 4% 7% Income > € 100, 000 10%

TAX CREDITS Employee Tax credit Personal tax credit-single -married Widowed bereaved in yr of TAX CREDITS Employee Tax credit Personal tax credit-single -married Widowed bereaved in yr of ass. One parent family tax credit Home carer tax credit Dependant relative Blind person credit-single both blind -married Additional credit widowed pers Age credit-single Age credit married 15 2010 € 1, 830 3, 660 1, 830 900 80 1, 830 3, 660 600 325 650 2011 € 1, 650 3, 300 1, 650 810 70 1, 650 3, 300 540 245 650

Standard Rate Bands 2010 2011 € € Single/Widowed 36, 400 32, 800 Married-one income Standard Rate Bands 2010 2011 € € Single/Widowed 36, 400 32, 800 Married-one income 45, 400 41, 800 *Married-two incomes 72, 800 66, 500 One parent/Widowed 40, 400 36, 800 » With a max transferability between spouses of € 45, 400 in 2010 and € 41, 800 in 2011 » AGE EXEMPTION LIMIT 2010 € 20, 000 € 40, 000 Single Married 16 2011 € 18, 000 € 36, 000

PENSION LEVY RATES: § First € 15, 000 Exempt § Next € 5, 000 PENSION LEVY RATES: § First € 15, 000 Exempt § Next € 5, 000 @5% § Next € 20, 000 - € 60, 000 @10% § Above € 60, 000 @10. 5% 17

Early Retirement Benefits Retirement Age 60 § Employee on salary of € 50, 000 Early Retirement Benefits Retirement Age 60 § Employee on salary of € 50, 000 joined after 1995 - early retiring at 55 § Service completed 22 years § Pension : 77. 8% x 22/ 80 ths x€ 26, 049= € 5, 573 § Tax Free Lump Sum : 90. 7%x 66/80 ths x € 50, 000 = € 37, 414 18

NUI Galway AVC contributions V`s Ordinary Deposit Savings Saving € 1, 000 pa/Interest rate NUI Galway AVC contributions V`s Ordinary Deposit Savings Saving € 1, 000 pa/Interest rate of 3% pa/ DIRT 25%/term 20 Yrs Value in Savings A/c € 24, 450. 10 Value in AVC Fund € 40, 961. 12 19

NUI Galway AVC contributions V`s Ordinary Deposit Savings Saving € 1, 000 pa/Interest rate NUI Galway AVC contributions V`s Ordinary Deposit Savings Saving € 1, 000 pa/Interest rate of 3% pa/ DIRT 25%/term 10 Yrs Value in Savings A/c € 11, 324. 88 Value in AVC Fund € 17, 475. 50 N. B. : to save € 1, 000 you would need to earn € 1, 300 gross. Tax on tax. 20

Actual AVC Member – Example Mary Murphy Retired in April 2010. 29 yrs service. Actual AVC Member – Example Mary Murphy Retired in April 2010. 29 yrs service. Age 65. Salary € 59, 000 NUIG Pension € 12, 705. 38 p. a. NUIG Tax free lump sum € 64, 162. 50 AVC Fund built up in 5 yrs @ € 300 pm = € 21, 075. 30 TAX free lump sum from AVC is € 21, 075. 30 Could have been € 24, 337. 50 from AVC if it was in her fund. 21

How much can I contribute ? § Maximum Income in 2011 § (Max income How much can I contribute ? § Maximum Income in 2011 § (Max income in 2009/10 (max income 2008 € 115, 000 € 150, 000) € 275, 239) § Income is taxable earnings § Less any contributions being paid to NUIG Scheme 22

Example § Employee aged 45 on a salary of € 60, 000 who joined Example § Employee aged 45 on a salary of € 60, 000 who joined post 1995 § Maximum contribution is: 25% of € 60, 000 Less 1. 5% of € 60, 000 Less 3. 5% of € 60, 000 - € 23, 951 AVC amount is € 15, 000 € 900 € 1, 262 € 12, 838 § Periodic contributions of pay equal to 1. 5% x pensionable remuneration PLUS 1% of reckonable pay at death/retirement (each year 1. 5% not deducted) 23

Tax Relief § Monthly Contribution € 200. 00 § Tax Relief € 40. 00 Tax Relief § Monthly Contribution € 200. 00 § Tax Relief € 40. 00 € 82. 00 § Net Cost € 144. 00 € 102. 00 § Lump sum can be made to AVC before 31 st October 2011 and tax rebate cheque and PRSI relief will be granted. § Contributions and tax relief operated at source 24

Investment of Contributions § Individual Retirement Investment Service § Plus 13 alternative pension choices Investment of Contributions § Individual Retirement Investment Service § Plus 13 alternative pension choices 25

Individual Retirement Investment Service § New Ireland’s unique lifestyle investment option § A single Individual Retirement Investment Service § New Ireland’s unique lifestyle investment option § A single fund can’t provide the right strategy for all members § Removes the need for the member to make complex investment decisions 26

How does IRIS Work ? Two Simple Rules § The longer the term to How does IRIS Work ? Two Simple Rules § The longer the term to retirement, the higher the proportion invested in equities. § As retirement approaches, benefits are secured by switching into fixed income assets and cash. 27

Example – Progression of the IRIS Fund 2018 (asset split) § Member continues to Example – Progression of the IRIS Fund 2018 (asset split) § Member continues to invest in the same fund § Asset mix of fund gradually changes as retirement approaches 28

New Funds Added: Medium Risk § Response to requests from Trustees and Members § New Funds Added: Medium Risk § Response to requests from Trustees and Members § Requirement for equity participation with lower risk / volatility – Protected Assets Fund – BNY Mellon Global Return Fund 29

Protected Assets Fund § Growth Potential – 98% of fund invested in equities and Protected Assets Fund § Growth Potential – 98% of fund invested in equities and cash – Equity / Cash allocation actively managed to minimise volatility § Protection – 2% of fund buys the guarantee – Fund cannot fall by more than 10% in any calendar year – Protection level increases during year – Protection reset every year on 1 st of January 30

Example § 01/01/2011: fund starts at 100 – Protection is 100 x 0. 9 Example § 01/01/2011: fund starts at 100 – Protection is 100 x 0. 9 = 90 § 01/07/2011: fund has grown to 115 – Protection is 115 x 0. 9 = 103. 5 § 01/10/2011: fund falls back to 108 – Protection is still 103. 5 § 01/01/2012: fund is still at 108 – Protection for 2012 resets to 108 * 0. 9 = 97. 2 31

Back - testing I 32 Back - testing I 32

Back - testing II 33 Back - testing II 33

BNY Mellon Global Return Fund § Key Features – Absolute Return Fund – Objective BNY Mellon Global Return Fund § Key Features – Absolute Return Fund – Objective to achieve EURIBOR +4% over rolling 5 year period – Equity participation with reduced volatility § Based on successful track record in UK 34

Elements & BNY Real Return funds – successfully smoothing out the current fluctuations of Elements & BNY Real Return funds – successfully smoothing out the current fluctuations of the market. Volatility management of Elements and BNY clearly providing a smoother investment Journey for clients over a testing 3 months. Source New Ireland

Options at Retirement § Tax Free Lump Sum § Ongoing Pension – Personal – Options at Retirement § Tax Free Lump Sum § Ongoing Pension – Personal – Spouses § Approved Retirement Fund ( ARF) – Minimum income of € 12, 700 – Free to invest as you wish – Withdrawals taxed as income 36

Making it easy to track your Fund Pensions Schemes Online § Password protected website Making it easy to track your Fund Pensions Schemes Online § Password protected website § Information on premium history § Information on fund value § Information on fund choice § It is easy to use § It is free § Review yearly – especially if circumstances change 37

New Ireland Website § www. newireland. ie New Ireland Investment Centre http: //fundcentre. newireland. New Ireland Website § www. newireland. ie New Ireland Investment Centre http: //fundcentre. newireland. ie § Up to date priceperformance information § Monthly factsheets – include asset split, fund size etc § Graph performance of funds 38

New Ireland Website § www. newireland. ie New Ireland Pension Centre http: //www. newireland. New Ireland Website § www. newireland. ie New Ireland Pension Centre http: //www. newireland. iepensionscentre. newireland. ie § Comprehensive source for all New Ireland pension material 39

What Should I Do Next? Contact: Ms Triona Lydon Pensions & Investments NUI Galway What Should I Do Next? Contact: Ms Triona Lydon Pensions & Investments NUI Galway Ph 091 -524411 ext: 5028 Email : Triona. [email protected] ie Or: Noel Hackett, QFA, Pensions Consultant New Ireland Assurance Eyre Square, Galway Tel 091 -563023; Mobile 086 -8186163 Email: Noel. [email protected] ie 40

Individual Consultations Noel Hackett will be in NUI Galway for Individual Consultations of 45 Individual Consultations Noel Hackett will be in NUI Galway for Individual Consultations of 45 mins (9 a. m. – 5 p. m. ) on Monday 18 th April 2011 and Tuesday 19 th April 2011 CONTACT: Anne Cormican Extn: 5901 Caroline Flannery Pensions Office Extn 5028 to book time. 41

Any 42 Any 42