Pension Accounts

Pension Accounts

Pension Accounts

When you add a new member, Prospera automatically creates a new SGC superannuation fund and Pension fund for the member, and links them so that at retirement, the superannuation will automatically roll over into the pension account.   All you will need to do is add in the relevant account balances, unless you wish to add a second Pension Fund for the member. 


Adding a New Pension Account

To add a new Pension Account click the CREATE NEW SUPER button.


Select the type of fund you wish to create from the dropdown menu.  


Super Fund types include:
  • SGC    (an account where Superannuation Guarantee Contributions will be paid into)
  • Pension   (a pension account, for use in retirement, or Transition to Retirement phase) 
  • Topup   (an account the client has which does not receive Superannuation Guarantee Contributions)
  • Stuck   (an account the client has which they have no ability to roll out of)
  • SSS  (State Super NSW, a government fund with specific rules)
  • Defined Benefit   (Superannuation benefit is not calculated using contributions and growth, it is calculated using a specific formula)

After selecting an account click NEXT.  

The Add Account - Account Details screen is then displayed. 



Ensure all fields with REQ next to the title are completed. 
Click ADD when completed to save the details.


Helpful Hints:

1.       Account Name - Add the name of the Fund / provider.

2.      Owner - Which member owns the fund?

3.      Associated SMSF - Only use if you are linking an SMSF to the member account.

4.      Annual Fee - Add annual fee if you would like the projected pension balance reduced by a fee.

5.      Net Rate of Return - Add the long term projected return for the fund, based on the member's risk profile    
 
6.      TTR Pension Rate - Add the percentage of the pension balance you would like paid as a Transition to Retirement Pension (if applicable). 

7.      Process Order - If there are multiple funds, select the order of roll over (1, 2, 3, etc) - or leave as zero.

8.      Tracked Account - There is no need to enter anything here until you are ready to "IMPLEMENT" the client for Track to Plan reporting.  

9.      Taxfree Component - Add the Taxfree component of the Pension benefit.

10.     Taxed Element - Add the Taxed component of the Pension benefit.

11.      Untaxed Element - Add the Untaxed component of the Pension benefit.

12.      Current Relevant Number - Add the Current Relevant Number, if required.

13.      Complying Pension 
If the Pension was commenced after 20 September 2007, the Pension will be "Non-Complying" for the purposes of the Social Security / Centrelink Assets Test.  It will therefore be included in the Assets Test calculation of eligibility for Centrelink entitlements.

If the Pension is a Complying Pension under the Social Security / Centrelink Assets Test; i.e. it was commenced before 20 September 2004, select "100% Complying" from the dropdown menu.
    
If the Pension was commenced between 20 September 2004 and 20 September 2007, and is therefore "50% Complying", select "50% Complying" from the dropdown menu. 

14.      Include Income Test - Select "No" if you do not wish the Pension to be included in the "Income Test" calculation for Centrelink entitlements.

15.      Current Purchase Price - Add the Current Purchase Price, if required   .

16.      Pension Payments 
If your Scenario is modelled using the "Cover Expenses" (default) modelling option, the system will draw sufficient funds from the Pension to meet the modelled expenditure within the scenario, subject to minimum drawdown requirements set out in the relevant legislation.
If you wish to "set" the level of Pension Payments, regardless of the level of expenditure within the scenario, you will need to set your scenario's Pension Modelling to "Age Based Minimum", and then set the regular payment you require.   Further instructions on how to do this are shown below.

17.      Lump Sum Withdrawals - Add any required Lump Sum withdrawals.


How to Set a Pension Payment (from point 16 above)

As highlighted at point 16 above, if you wish to "set" the level of Pension Payment received, rather than use the system default of drawing sufficient funds from the Pension to meet the modelled expenditure within the scenario (subject to minimum drawdown requirements set out in the relevant legislation), you will need to change the scenario model type to "Age Based Minimum". 

To do this:
  1.   Go to your Scenario menu (at the top right of your screen)
  2.   Select "Manage Scenarios"
  3.   Click on the Scenario you wish to set the Pension Payment in.  This will open the Scenario Details screen (as shown below)
  4.   Under "Pension Modelling", click on the dropdown menu and select "Age Based Minimum"
  5.   Click  UPDATE to save the change.



Once you have set the Scenario to model pensions using the Age Based Minimum calculator,  return to the Superannuation Page within your modelling:

  1.    Select the relevant Pension Fund by clicking on it to open the detail
  2.    Scroll down to the Pension Payments section (under the orange heading), as shown in the diagram below
  3.    Click on ADD to add your specific Pension Payment amount
  4.    Enter the applicable start and end dates
  5.    Enter the Monthly Pension Payment you require (either the monthly amount or percentage of the Pension Balance)
  6.    Click UPDATE to save the payment amount. 

If you enter a payment in error, and need to remove it, go to the right hand side of entry, where it says "Keep?", and select "No" and click UPDATE.  This will remove the entry.

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