html5-img
1 / 67

Presentation to Presented by:- Noel Hackett (QFA, MIB, Dip Invest) New Ireland Assurance Senior Pensions Consultant Te

Presentation to Presented by:- Noel Hackett (QFA, MIB, Dip Invest) New Ireland Assurance Senior Pensions Consultant Tel: 086-8186163 Tony Delaney- Area Manager 12 th & 13 th April 2012. time11.00;13.00;15.00. Benefits at Retirement. At retirement your benefits will come from:-

ruggiero
Download Presentation

Presentation to Presented by:- Noel Hackett (QFA, MIB, Dip Invest) New Ireland Assurance Senior Pensions Consultant Te

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Presentation to Presented by:- Noel Hackett (QFA, MIB, Dip Invest) New Ireland Assurance Senior Pensions Consultant Tel: 086-8186163 Tony Delaney- Area Manager 12th & 13th April 2012. time11.00;13.00;15.00

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

  3. State Pension • From 2012 • Single Person €230.30 per week • Married Couple €383.80 • Applies to all employees who joined since 1995

  4. NUIG Scheme • Defined Benefit Basis • For employees joining after 1995 :- • Pension Benefits based on Pensionable Salary • Salary less twice the OAP (In 2012 a deduction of €23,951) • Employees pay PRSI and qualify for OAP

  5. NUIG Scheme • Normal Retirement Date • Pre 2004 employees – From age 60 • Post 2004 employees – From age 65 • 1/200th pensionable service/pensionable remuneration to 3.33 times State Pension (39,918) Plus • 1/80th x pensionable service/pensionable remuneration in excess of this limit(change to normal integration rules on 1/1/2004) • Pension of 1/80th of Pensionable Salary per year of service, on integrated basis(less twice state) same for salary over €39,918pa • Tax Free Lump Sum of 3/80th of Salary

  6. 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 35/80ths of €26,049 – €11,396 p.a. • Tax Free Lump Sum is 105/80ths of €50,000 - €65,625

  7. 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

  8. Bridging the Gap - 2 Options • Purchase of Notional Years of Service Through NUI Galway Pensions Office • AVC Scheme Through New Ireland Assurance

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

  10. 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 • Your pension Tax free lump sum based now on your final (cut) salary+ scope to enhance this • “Revenue Final 10 year salary rule”

  11. 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

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

  13. How much can I Contribute ?

  14. USC for self assessed under age 70 the 2012. ratesPart of aggregate income Rate of USCFirst €10,030 2%Next €5,980 4%Next €83,984+ 7%Income > €100,000 10%

  15. TAX CREDITS 2010 2012 € € Employee Tax credit 1,830 1,650 Personal tax credit-single 1,830 1,650 -married 3,660 3,300 Widowed bereaved in yr of ass. 3,660 3,300 One parent family tax credit 1,830 1,650 Home carer tax credit 900 810 Dependant relative 80 70 Blind person credit-single 1,830 1,650 both blind -married 3,660 3,300 Additional credit widowed pers 600 540 Age credit-single 325 245 Age credit married 650 650

  16. Standard Rate Bands 2010 2012 € € 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 2012 Single €20,000 €18,000 Married €40,000 €36,000

  17. Public Sector:PENSION LEVY RATES: • First €15,000 Exempt • Next €5,000 @5% • Next €20,000- €60,000 @10% • Above €60,000 @10.5%

  18. Government Pension Fund Levy • New levy to be charged to pension funds at a rate of 0.6% per annum on the value of the fund each year. • 0.6% of the fund (AVC), valued on 30th June 2011 and subsequent years until 30th June 2014. • Payment to be made each year on 25th Sept 2011, 2012, 2013 and 2014 by Fund Manager/Administrator to Government. • This Levy is being used to fund the new “Jobs Programme”

  19. 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/ 80ths x€26,049= €5,573 • Tax Free Lump Sum : 90.7%x 66/80ths x €50,000 = €37,414

  20. Actual AVC Member – Example Mary Murphy Retired in April 2010. 29yrs service. Age 65. Salary €59,000 NUIG Pension €12,705.38p.a. NUIG Tax free lump sum €64,162.50 AVC Fund built up in 5 yrs @ €300pm = €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 Incomein 2011/12 €115,000 • (Max income in 2009/10 €150,000) (max income 2008 €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 post 1995 • Maximum contribution is:- 25% of €60,000 €15,000 Less 1.5% of €60,000 € 900 Less 3.5% of €60,000 - €23,951 €1,262 AVC amount is €12,838 • Periodic contributions of pay equal to 1.5% xpensionable remuneration PLUS 1% of reckonable pay at death/retirement (each year 1.5% not deducted)

  23. Tax Relief • Monthly Contribution €400.00 • Tax Relief €80.00 €164.00 • Net Cost €320.00 €236.00 • Contributions and tax relief operated at source

  24. 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

  25. Options at Retirement • Tax Free Lump Sum • Ongoing Pension • Personal • Spouses • Approved Retirement Fund ( ARF) • Minimum income of €18,000 • Free to invest as you wish • Withdrawals taxed as income • AMRF (Approved Minimum Retirement Fund) • €119,800 limit

  26. Investment of Contributions • Individual Retirement Investment Service • Plus 13 alternative pension choices

  27. 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

  28. 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.

  29. 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

  30. 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 Real Return Fund • 5.15% Secure Cash Fund

  31. Evolution of investment markets Greater risk management required!

  32. BNY Mellon Global Real Return Fund

  33. BNY Mellon Global Real Return strategy for long-term growth – the process explained. Allowable assets Strategy type Absolute / Target return Fund Can invest in: Return targeted EURIBOR +4% over rolling 5 year periods Equities Government Bonds Corporate Bonds Cash Derivatives Alternatives • Unconstrained • Flexibility • Active risk management • Long term

  34. Libor + 4 % p.a. – a challenging targetPeriods to 31 January 2012 (Sterling Fund target) Approved 09/02/12 Use Newton Real Return (World Market Indices 30 Yrs)– dd.mm.yyyy Provided by Lars Monthly Source: Newton, as at 31 January 2012

  35. Unconstrained multi-asset investingThe process…….. 3 2 4 1 5 Newton's starting point is the target… …which defines the portfolio structure… … and provides the building blocks… … and Newton's view of the world… … to construct a single, flexible portfolio Return(LIBOR +%) • Stock characteristics • Bond characteristics • Asset allocation • Regional mix • Volatility • Currency Research Recommended Lists Global Real Return strategy Global Strategy Risk(Volatility%) Model Portfolios A BNY Mellon Financial CompanySM MEDIUM HIGH LOW Absolutely focused

  36. The practice behind the theory……….. Illustrates the difference between this fund and a typical market portfolio MSCI World – Financials 24.7%!! FTSE 100 – Financials 17.73%!!

  37. Asset Split – it’s like Consensus?! But not a Market portfolio! But not a Market portfolio! Pension Gilt Fund: 31st Dec 11: – Italian Bonds 20.25%, Spanish Bonds – 8.83%, Belgian Bonds 6.15% - examples!!

  38. BNY Mellon Global Real Return Fund (EUR) Positioning at December 2011 Use RR £ template – dd.mm.yyyy Provided by Phil S By geography and asset type By currency Derivatives and other 4.0% Equities 48.8% Cash & equivalents 26.4% Bonds 17.3% Bonds 19.0% Corporate bonds Convertibles UK/Europe1.8% *Other (CAD, DKK, HKD,IDR, PLN, ZAR, THB) Managing currency risk within a global unconstrained portfolio Source: Newton, December 2011

  39. Newton Real Return Fund (GBP)Longer term results Approved 09/02/12 Use Absolute Intrepid Weekly Performance Chart vs. Equities, Bonds & Cash – dd.mm.yyyy Provided by Lars • Key • Return less risk free rate (LIBOR 1 month) divided by standard deviation • Standard deviation • Value at risk: worst case of 95% confidence (normal distribution assumed), 1 month investment horizon Ex Post Approved 08/02/12 Ex Ante Source: Newton, as at 31 January 2012, total return, gross of management fees, gross income reinvested Figures are based on sterling returns. Past performance is not a guide to the future Please remember that the value of shares and the income from them can fall as well as rise and investors may not get back the full amount originally invested. †Restyle date ‘Equity like’ performance with lower volatility

  40. BNYM Global Real Return 1 year performance: Smoother investment journey by managing risk and volatility. Risk containment strategies within the fund clearly reducing ‘Market risk’ throughout 2011 Source: New Ireland

  41. BNYM Global Real Return from inception: Smoother investment journey by managing risk and volatility. Volatility BNY 7.9% Volatility Consensus 14.6% BNY strategy clearly managing short term volatility Source: New Ireland

  42. Protected Assets Fund

  43. What were our design goals? “My investment fell 35% in a year. Promise me that won’t happen again.” • Manage ongoing volatility • Protect against sudden crashes • Be explicit about the protection • No fund manager risk • Improve on existing protected funds • Generate a return

  44. ProtectedAssets fund – the concept! Increase clients exposure to equities when markets are steady and low in volatility. Decrease clients exposure to equities when markets are volatile and illustrating higher levels of risk. Low Volatility = Share prices move up and down more steadily over time High Volatility = Share prices move up and down rapidly over short periods of time

  45. Equity Split – Key point not a Tracker!! Total return indices – i.e. dividends reinvested

  46. In any calendar year, the value of an investment in the Fund (before charges are deducted) will never fall below 90% of its highest value in that year.

  47. So how do we provide the protection? • Derivative asset (currently approx. 2%) provides insurance against market falls • Unlike competitor CPPI products, can’t get cash-locked as: • Protection resets once a year • Derivative pays out if markets collapse • Protection provided by Bank of Ireland

  48. Protected Assets fund versus underlying equities! Protection Resets on 1st January each year, and underlying index levels remains irrelevant! Peak to trough fall of 24.7% requires a gain of 32.8% just to breakeven!

  49. A quick Economic view of the world to get us started today……

More Related