Understanding your PSS member statement


Hello and thank you for joining me for
this walkthrough of the 2016-2017 PSS member statement. I’ll be taking you
through our new look member statement page by page. Before we start there is
some important information that I need to let you know about. It is general advice only, it’s been prepared without taking account of your personal
objectives financial situation or needs. So where appropriate seek financial
advice. It’s also important to note that this webinar was prepared for PSS
contributing members, however if you are a PSS preserved member that
doesn’t mean you need to close the window it just means that perhaps not
every section will be relevant or accurate for you. My name’s Maddie, I’m a Member Education Consultant for CSC (Commonwealth Superannuation Corporation). We’re the trustees for a large number of Australia’s ADF and APS members
superannuation, we look after the older schemes like DFRDB and PSS as well as the newest schemes like ADF Super and PSSap There’s a few things we’ll be covering
today, as I said we’ll be going through everything page by page which includes
looking at your details and where you need to go if something’s incorrect.
We’ll break down some of that complex super terminology that you might see in
your statement and we’ll also look at some other sections that may or may not
apply to you. It’s very important to remember that the figures we’ve used in
this presentation are entirely made up, they may not look like your actual
statement in fact they probably won’t and that’s okay. Regrettably there isn’t always time to
cover everything however we do have a full suite of webinars available for you
to learn more about the PSS. If you’re looking at learning about the basics of
the PSS, growing that benefit you can watch our PSS building your benefit
webinar. If you’re more interested in learning about claiming your benefit,
about retiring, we do cover that as well. We cover
taxation and some example calculations in our reaping the rewards webinar. If
you’re interested in learning about redundancy and how that might affect
your PSS benefit, whether you’re eligible to claim, that’s covered in our
redundancy webinar. Let’s take a look at your details first, we’ll be starting with the table that says your personal details at 30 June 2017. The top two
lines, hopefully nice and easy, I’m sure you know your name and your reference
number. So we’ll move to number one, you’re super salary at 30 June 2017. Your
super salary is your base salary, plus any recognized allowances. Or for some
people it might be specified in your agreement. Only your employer can change
this information, so if you think that there’s a mistake you’ll need to get in
touch with your payroll. Bear in mind that if you’ve had a pay rise since your
last birthday, that won’t be shown until your next
member statement. Number two is your contribution rate at 30 June 2017. Your contribution rate will either be zero percent or it will be two to ten
percent. If you want to increase or decrease this rate, get in touch with
your payroll, they may have a form for you to complete. If you are thinking
about changing it, please bear in mind that there are contribution limits on
how much you can put into money every financial year, into super every
financial year sorry, so watch our building your benefit webinar to learn
about that. Number three is when your membership commenced now this is
referring to when this particular record started. So if you’ve always been in the
PSS since you joined the public service these dates will probably match, but if
you’ve left and come back, it will likely be the date that you came back and
started contributing again. We still recognize your previous service but we
must show when this record became active. Number four is your employment status,
this will either show us full-time or part-time depending on what you were
working at your last birthday. So if you’ve changed since your birthday, just
like you’re super salary that won’t be shown until your next member statement. Number five tells us whether or not you’re a limited benefits member or lbm this will be a yes or a no flag. Being a limited benefits member relates to what
you can claim if you retire because of invalidity, or the benefits payable on
your death. If you’re not a limited benefits member, then you have full out
to the standard invalidity benefit. If you are a limited benefits member then
either you didn’t fill in what we call a c-max form when you joined or rejoined.
Or you did fill it in and from that form we determined you’re likely to take
excessive sick leave in the first three years of your membership due to a
pre-existing illness or injury. So that status expires after three years. Number six tells us whether or not you’ve supplied your tax file number if your tax file number has not been supplied you’ll pay extra tax on your
productivity contributions until we have it. And you won’t be able to make
personal member contributions. The last two lines are hopefully self-explanatory. The difference is that you can update your mobile and email address
without going through your payroll. You can do that yourself through Member
Services online. Let’s move on to the benefit accrual looking at how your benefits grown over the reporting period we’ll start with the benefit accrual
table. If you’re not already familiar, the PSS defined benefit formula is your
final average salary multiplied by your accrued benefit multiple. Your final
average salary is the average of the last three super salaries, which we
talked about a moment ago, reported by your employer. So if you haven’t had a
salary increase for a little while perhaps your FAS hasn’t grown and
that’s okay. Where you will see some growth is in the accrued benefit
multiple. So this grows every year depending on what contribution rate
you’ve elected. So the higher the contribution rate, in theory the higher
your ABM will grow. We multiply those two figures together to get your total
benefit accrual which is essentially your defined benefit. If you want to
learn more about how we got to those figures, how we calculate that FAS
and that ABM, that’s covered in our building your benefit webinar. It’s
important to remember that this figure here is just your defined benefit. This
doesn’t look at any amounts you’ve got, any other amounts you’ve got, in PSS. We’ll
take a look at that now. So this is your benefit summary, this shows us everything
that’s coming during the reporting period. Now the very first line and we’ve
got there is your total benefit at 1 July 2016 this figure includes any
amounts that you may have rolled in prior to this date or any
co-contributions you may have received prior to this date this is everything.
Now if we look at line 1, that’s your member contributions this is the member
contributions your fortnightly personal contributions you’ve made during the
reporting period and it’s the amount that we will report towards your
non-concessional contributions cap. Number 2, your productivity contributions,
these are your employer contributions during the reporting period and they’re
usually 2 to 3 percent of your salary. These are pre-tax contributions so PSS
will take 15% tax when we receive them. The amount shown here is after that 15
percent tax is taken off. The gross productivity contributions count towards
your concessional cap as well as another notional amount that’s not shown here on
your statement. If you’re interested in learning more about that concessional
contributions cap, and learning about what counts towards that, that’s covered
in our building your benefit webinar. Number 3, our co contributions, these
are amounts paid by the ATO for people below a certain income threshold who
have also made after-tax contributions. These amounts can’t be converted to
pension so when you leave you may be able to take them as cash, otherwise
you’ll need to roll them to another super fund. If you were eligible for co-contributions during financial year 16-17 these will be paid to PSS after you lodge
your tax return, and you’ll see them on your next remember statement. Number 4 shows us whether you’ve transferred any money in during the reporting period, so
whether you’ve rolled any money in from another super fund.
Now generally these amounts don’t count towards your pension and they’re
typically only payable as a lump sum. You can roll those amounts out at any time.
There’s very limited circumstances under which a rollover can count towards your
defined benefit and your pension; the money must have accrued before the
1st of January 1996 with no contributions from that date. If you
think you’ve got some superannuation that fits that criteria, get in touch
with the contact center, they’ll be able to explain to you how to roll that in
and how that counts towards your defined benefit. You’ll also see some lines
either side of that, the low-income super contributions and the super guarantee
contributions these are some more ATO amounts so if you want to learn more
about those there’s some information on the ATO website for you. Let’s move to
number 5 which is your net earnings. This is the total net earnings during the
reporting period on all your invested components. What do I mean by that? I mean that’s the earnings on your member contributions, your productivity
contributions, co-contributions and transfers in, all those amounts of money.
Investment returns in super are taxed at 15% so the figure shown here is after
that’s been deducted this is also after any indirect costs associated with
investing your invested components, are deducted. Number six, your employer
component accrual. This is the notional or unfunded employer amount for the
reporting period and it’s used to top-up your defined benefit to equal that FAS
times ABN calculation. Your employer pays the difference between your total
benefit accrual from the first page and your member and productivity components. So in years where fund earnings are good less employer top-up is required and
some people may even see a negative. In years where the fund performs poorly the
top-up is usually bigger. Now in our example we’ve left number 7 blank,
however you may see a withdrawal figure here if you’ve gone through a family law
split or rolled out any money during the reporting period. If you see an amount
here under the withdrawals and you don’t remember making a withdrawal get in
contact with us we’ll let you know why that might have occurred. Now down the
bottom we’ve got your total benefit at 30 June 2017, it’s important to remember
that this may not always match the total benefit accrual that we looked at before.
Because of transactions like rollovers and co-contributions, so this is your
total. This is your defined benefit plus those extra amounts. Now have a look at
the rate of allotment so this is essentially an indicative rate that
shows us how much your benefit has grown by over the reporting period. It’s not
necessarily the same as the earning rate that you’ll see on the PSS website this
is just an indication of the way we allocated the earnings to your account. Down the bottom we’ve got a table for your benefit details at 30
June 2017. Number one is your preservation age, so superannuation law
restricts when you can access your money and preservation age is one of these
restrictions. It’s determined by your date of birth now it doesn’t restrict
you from claiming a pension at 55, you can claim your PSS Pension. Preservation
age just restricts what you can claim as a lump sum. Number two is your preserved
benefit, so this amount can’t be claimed as a lump sum until you’ve met your
preservation age and retired. So remember, this is just for lump sums, pension rules
are different. This is effectively saying that this preserved benefit is tied up in
superannuation until you’ve met conditions of release. Number three is
your restricted non-preserved benefit. This amount is restricted by your
employment so this amount can only be paid to you once you leave the APS. If
you leave, this amount would then move to number four as an unrestricted non-preserved benefit, you can take an unrestricted non-preserved benefit even
if you’re not at preservation age. In the PSS, no benefits are payable until you
leave the APS, so this amount is almost always zero for contributing members.
There are implications on taking this unrestricted non-preserved component on
its own, that is not taking it at the same time as your defined benefit
pension, so if you see an amount here, if you’re thinking about taking your
unrestricted non-preserved benefit please get in contact with us first to
understand whether that might impact the rest of your PSS benefit. Number five,
your SIS upper limit. This is a frozen calculation from 1999 that helps us
determine that lump lump sum figure that you can take while you’re still below
your preservation age, or if you’re not permanently retiring from the work force.
If you joined PSS after 1 July 1999 your SIS upper limit is zero and you cannot
take any lump sums unless you’ve met your preservation age and retired. If you
have got a SIS upper limit, it will either be the same or a higher figure than your
restricted non-preserved benefit from line 3. Number 6 shows us your minimum
amount on exit. This is a frozen calculation
from 2007 that will protect some of your benefit even if the investments plummet,
it’s a guaranteed dollar amount payable regardless of fund performance. As a
contributing member your benefit is defined by the FAS times ABM
calculation, so you don’t need to worry about this as much. But if you leave and
preserve your benefit, you will be affected by investment risk, you will
have investment choice, and so this minimum amount on exit might be more
important to you. Let’s move on to some other sections that you may see on your
statement and we’ll show you how to read those. The first one to look at is the benefit options at 30 June 2017. So this will look different for you, depending on whether you’re over
or under age 55 at 30 June 2017. So you won’t have both of these tables, you’ll
have one of them. Our top example is for someone who’s resigning or leaving
before age 55, this person has a SIS upper limit so they’ve got a couple more
options but if you don’t have a SIS this section might look a bit. bit boring
for you. When you retire you have a range of different options and some of those are
shown in that bottom example. Now the options will not be the same for
everyone it’s going to depend on your age, your preservation age, your work
status, and that SIS upper limit. The amounts that these benefit options are
based on may change so you should always seek further information about your
benefit options from CSC before withdrawing any part of your benefit. The
best way to do that is to get a benefit estimate. Now if you’re interested in
learning more about those options, about retiring and claiming your benefit, you
can watch our reaping the rewards webinar. As a PSS contributing member
you have inbuilt death and invalidity benefits this is not insurance you’re
not paying any premiums for this, this is one of your scheme entitlements. Our top
example is for a benefit for invalidity, now if you retire as a contributing
member because you’re TPI (totally permanently incapacitated),
we basically project your accrued benefit multiple, that ABM, to age 60. We say what would your ABM have been if you kept contributing to
PSS until your 60th birthday. Now the options there might not be the same as
your options, so read the invalidity benefits fact sheet from our website to
learn more about those options, those calculations. It will also give you some
information about the process that you go through if you’re thinking about
going through a claim like that. Our bottom example is for a death benefit, so
similar calculation to the invalidity benefit. We still project your ABM to age
60, however if you’ve got an eligible spouse they get a portion of your
benefit which is why those pension figures look different between each
option. If you’re doing some estate planning perhaps you’re interested in
learning about how this works from PSS perspective go and read our death
benefits fact sheet to find out more. This is really important because the PSS
is not the same as a normal superannuation fund,
we don’t take binding nominations for beneficiaries, so if you are looking at
these figures and trying to understand them, understand what you can do with
them, that fact sheet is the first place to go. Now this section may be blank for
some people, this is additional death and invalidity cover, so this is on top of
those inbuilt scheme benefits that you’ve got that we just looked at a
moment ago. This is additional cover that you can apply for through our
underwriter AIA, it’s only available for contributing PSS members. Now if you have
this cover, you pay for half of the premium and your employer pays for the
other half so your half of the premium just gets deducted out of your pay every
fortnight. Now if you’re thinking about taking out this cover, definitely read
the product disclosure statement just like with any insurance product and then
call us up and we’ll give you a quote over the phone. If you’ve already got
this cover, this is your chance to check that everything’s ok this is your chance
to check that you’ve got a level of cover that you’re happy with, this is
your chance to just make sure everything’s on track. Now the surcharge
debt, this was a surcharge on some super contributions that was abolished over
ten years ago but if you’ve got one showing on your statement you are still
required to pay it. You’ve got the choice to pay it at any time, you can pay by
hour be pay or check or you can wait until you’re claiming your benefit or
retiring and you can either pay that out of a lump sum if you’re taking one or
you can have a permanent reduction applied to your pension. This might be
one of those situations where you’d want to seek financial advice to find out how
to actually pay that surcharge debt. But it is good to know that interest is
added to the debt on the 30th of June each year at the 10-year Treasury bond
rate. So if you were to have your debt completely cleared off by the 29th of
June you wouldn’t have any interest added for that year. Basically 364 days
interest-free so seek financial advice to find out whether you should be paying
it now or whether you should be paying it later. We do also have a fact sheet on
this surcharge debt that might be useful to you if you’re trying to figure out why
you might have accrued that debt to begin with. Now fees and other costs, this
is right at the end of your statement after your transaction summary. I want to
start by saying that the PSS does not charge you any administration fees,
we’re not taking out $5.00 a month or anything like that. to cover
administration costs. Those costs are covered by your employer, what you will
see is an indirect cost. So this is an estimate of the proportion of the costs
that reduced your investment returns during the reporting period before we
added those net earnings that we looked at earlier to your balance. So what do I
mean by that? basically this is to give you an indication of how much it cost
you or costs CSC for us to invest your money costs us money to make money and
this is just showing you roughly how much we had to take out. Now because it’s
an indirect cost this means that we didn’t take this money out of your
balance, effectively we got the investment returns back, we took that
proportion off that to cover those costs and then we added the net amount to your
balance. So there was never any deductions from your actual balance.
Some people may also see activity fees, now these are related to request for
family law information and reconsideration requests. That may have
set some alarm bells off for some people if they have gone through that process
because this fee has already been paid. So if you’ve been through this process
you’ll know that you had to pay a fee upfront, we’re only showing it here for
record-keeping. I can assure you we definitely haven’t taken it out of your
account twice this is just to show you how much those fees were. Some other
resources that I can direct you to if you’re interested in learning more about
superannuation or finances and money in general. The first one I can send you to
is the PSS website, you can download your old member statements you can put them
all next to each other and compare them all if that’s what you want to do. You
can also view the member statement guide, this comes out with your statement pack
every year and it does cover some similar content to what we’ve talked
about today but it’s a good way to sort of reinforce that knowledge or look at
it in a different way. We also run public seminars in capital cities pretty
regularly in Australia if you are interested in that it covers the lifecycle of your benefit so it covers everything from growing it to
reaping the rewards you just need to register via our website. The next one I
can direct you to is the Centrelink financial information services offices
or as they call themselves FISO’s they focus on financial literacy so they can
sit down with you for up to an hour to have a one-on-one consultation and help
you understand things like super, help you understand things like lending
and shares and money in general. Now this is a free service, you don’t need to be
receiving a Centrelink benefit to access these, these officers this is available
to everyone. In the bottom right we’ve got the details for the MoneySmart
website this is another financial literacy resource, they have lots of
calculators, tools, guides, fact sheets on their website to help you get an
understanding of those similar sort of topics and improve your financial
literacy. In the top right we’ve got industry fund services these are the
planners that CSC partners with to give our members financial advice, they’re
fee-for-service financial advisers but they don’t receive any trailing fees or
commissions what that means for you is that they’re not going to recommend your
product just because they’re going to get a bonus from it they’re going to
recommend you the product that’s best for you or give you the advice that’s
best for your situation the first appointment thing is 185
dollars at which time they’ll see what they can do for you they will give you a
quote on how much a full statement of advice will cost generally comprehensive
financial advice through ifs will cost you somewhere between $2,000 and $5,000
which may sound like a lot but remember you’re not paying any fees or
commissions years down the track just a one-off fee. That brings us to the end,
hopefully this has helped you get some value out of that piece of paper we send
you every year you’ve got some resources to look into if you want to learn more
about superannuation or money and we do have those seminars and webinars
available to you also. Thank you very much for watching

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