NTGPASS Management and Administration Reforms How NTGPASS works
NTGPASS Management and Administration Reforms How NTGPASS works NT Government Mj How NTGPASS works Members contribute between 2% and 6% of salary into their accumulation account This money and the earnings on it belong to the member These individual savings accounts make up the NTGPASS fund Superannuation Trustee Board responsible for investing the NTGPASS fund
In return for making their contributions, members earn benefit points each year 1 benefit point for each % of contributions (e.g. 6% contribution = 6 points) When a member leaves NTGPASS, these benefit points are used to calculate their NTG-funded lump sum defined benefit Benefit points * 2.5% * benefit salary (average of last 3 contribution salaries) Example: 120 benefit points * 2.5% * $109 403 (AO7) = $328 209 On leaving NTGPASS, the member receives their savings (plus earnings) plus the lump sum. NTGPASS members also belong to Drivers for change NTGPASS closed to new members in August 1999 Membership of 12 000 is now less than 2 700
Small specialized team within the Superannuation Office (NTSO) Increasingly onerous ATO and APRA reporting is leading to high key person risk With status quo, the NTSO faces need to recruit more staff with highly specialised expertise to keep delivering the same services to a reducing number of members NTGPASS has similar regulatory reporting obligations to AustralianSuper (with 2 million members and $123 billion of members savings) New IT system needed, as current system (SuperB) is unsupported beyond 2020 As the size of the NTGPASS fund, and membership, declines it becomes less and less feasible to transfer it to an external fund, and risks to members increase
NTGPASS Reform History 2014 NTGPASS account-based pension Government decided to close the NTGPASS account-based pension product At 30 June 2014 there were 212 pensioners and funds of $94.6M Decision made to transfer those accounts using a successor fund transfer Mechanism to transfer all member accounts without consent Proposals sought from a number of funds, with AustralianSuper selected Transfer completed in January 2015 2015 NTGPASS accounts of former employees and spouses Government decided to close NTGPASS to former employees and spouses At 31 March 2015, there were 4224 of these accounts and funds
of $411M Decision made to transfer those accounts using a successor fund transfer Proposals sought from a number of funds, with Sunsuper selected Transfer completed in February 2016 Administration and Management Reform Government has approved management and administration reforms to NTGPASS Successor fund transfer of members savings ($575M) to an external fund The size of many external funds means they get a higher rate of return than NTGPASS for equivalent investment options
Up to 18 June 2018, NTGPASS Growth option was 8.92% AustralianSuper was 11.16% and Sunsuper was 10.50% Members can then choose to leave their savings with the successor fund, or roll them over to another fund of their choice Government-funded lump sum defined benefit will not change and will continue to be managed and paid by the NTSO when you leave Members will still need to contribute to their new fund each fortnight and earn benefit points No job losses within the NTSO How NTGPASS will work (your savings) Mj
Implications for NTGPASS members The reforms offer members: a wider choice of investment options a wider choice of fund managers (including self-managed) access to a range of contemporary services financial advice can opt in for additional insurance on-line account access account-based pension products, including while still an NTGPASS member nominate beneficiaries on death greater transparency around investment and administration fees, together with the flexibility to move their savings to a different fund to better suit their needs access to the same services as choice-of-fund public servants
Implications for NTGPASS members The employer-funded defined benefit, (separate to members savings) will be unaffected, and remains government guaranteed Fee transparency may mean members feel worse off The reality is that members are already paying significant investment fees in the current arrangement (to investment consultant and its managers) Having visibility to all fees means that members will be able to make an informed decision about whether to leave their savings with the successor fund, or roll them to a fund with different fees Members will have greater choice regarding their savings The selected fund will need to be one where members have access to choices and options, but will not be forced to act if they do not want to engage
Existing death and invalidity benefits Existing death and invalidity benefits remain unchanged Up to age 60, NTGPASS members have free death and invalidity benefits Provided by NTSO as an additional NTGPASS defined benefit
Benefit amount depends on age and salary reduces as you get older Death benefits Paid to your estate if you have any dependants at the time of death Dependants include your spouse, children (of any age) and other people who are financially dependant on you Invalidity benefits
Paid to you if the Commissioner determines you are permanently unable to work because you are so physically or mentally incapacitated that you are unfit for any available full time or part time employment for which you are reasonably qualified by education, training or experience. Next steps Legislation changes Expect to be introduced August, passed and commence in December 2018 Consultation and advice NTSO consulting with unions representing NTPS employees NTSO will undertake a roadshow explaining the changes and rationale A dedicated web page has been established
Central point for information Contains bulletins and up to date information regarding the transfer Scope of requirement is being finalized to assist in selecting the successor fund Made public in June 2018, with submissions from funds due in July 2018 Panel will select and recommend a preferred fund in August 2018 Superannuation Trustee Board will make final decision Successor fund transfer will occur within 12 months Role of Superannuation Trustee Board Superannuation Trustee Board (STB) is responsible for managing and investing the NTGPASS fund Statutory board, that includes union representation
Not subject to direction by the Minister (Treasurer) or Commissioner STB makes the final decision Approving the successor fund The panel will make a recommendation, but it is the STB that decides which fund will be the transferee About whether the transfer is in the best interests of members If the transfer is not in members best interests, it cannot proceed About whether the selected successor fund is conferring equivalent rights If the STB is not satisfied, then the transfer cannot proceed The Superannuation Trustee Board Nine members
Kathleen Robinson Chairperson Marianne McAdie Deputy Chairperson Craig Graham Under Treasurer Michael Martin Unions NT nominee Sarah Burchett Unions NT nominee Col Goodsell NT Police Association nominee Alex Pollon Under Treasurer nominee Tiziana Hucent Under Treasurer nominee Mark McAdie Commissioner of Police nominee Useful links Ntgpass.nt.gov.au www.super.nt.gov.au
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