SASS super scheme

Discussion in 'Superannuation, SMSF & Personal Insurance' started by crocodile, 5th May, 2021.

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  1. crocodile

    crocodile Member

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    Hi Everyone and thanks for a great and informative resource. Can anybody point me to anything that will help me get my head around how the NSW State Gov SASS scheme works. I've looked at the Aware web site and can't make any sense of it at all.

    My wife is a gov school teacher and has been in state super for around 35 years. We'll be retiring in about 5 years so I'm just trying to do some rough as bags income projections. Even looking at the statements is sending me catatonic. I can't see where the 9.5% super guarantee is paid or what level of own salary contributions have been made. A bit of a basic "How it works" would be great. I tried a search for SASS but it seems these ones are by users that already know how it works.

    Thanks,
    Croc
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Her scheme may not be an accumulation scheme. It is likely defined benefit. In which case no actual contributions are paid but are notionally received. So unlike normal super there isnt an "account" to see contributions etc the formula for how benefits accrue are important too. You can max out and working wont add a further cent to benefits. The fund often hides that feature to limit people quitting jobs. But they will explain it. I have seen peopel retire on "X" times the average of the final three years salary...for life. A DB fund may also allow a member to make extra accumulation contributions or salary sacrifice and this varies with which fund she is in. The real old one or the newer old one. . DB funds generally pay a pension based upon a multiple of final retirement salary etc. DB funds have been closed to new members a while and newer mambers may be in the accumulation scheme which will show actual contributions. DB funds are the unicorn poop of super and under no circumstance should it be closed or anything withdrawn without financial advice. There are usually two options on retirement and the choice needs advice too.

    There are strategies to consider to max her final pension benefits. It WILL be wise to understand what her unused contribution cap is and how the fund benefits work so extra contribution strategies etc ahead of retirement can be considered. DB funds seem complex but are quite straight forward albeit with a load of different rules to normal super.

    I would seek paid advice given your level of understanding. The fund should provide that to both of you. They can also explain how death benefits work. Its money well spent for specific advice.
     
  3. crocodile

    crocodile Member

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    Thank you for your very detailed information. Looks like I have some reading to do and questions to ask. I have a paid financial advisor for my own super, my mother's investment fund and my wife's mother's fund as well. He is Melbourne based so not sure if he understands the NSW SASS system. I'll give him a ring and have a chat. Looking at the statements there does appear to be a 4% salary sacrifice and a portion paid in from the gov but I have no idea how to decipher it. I'll ring them and see what I can get and then bat it off to my financial whiz. I'm just trying to get an approximate financial position for retirement in a few years time and see what effect it has on assets tests etc.

    Again, I appreciate your time.
    Croc
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I would suggest the SAAS scheme can provide far more detail than a licensed financial planner who wont even know the PDS details applicable to the specific member and isnt authorised to access the account.

    Its like running back to your GP when a specialist has diagnosed something specific. A specialist is the best to advise. The GP may understand the basic medical issues but add no further help and certainly cant advise on treatments etc. They may even be quite unhelpful.
     
  5. crocodile

    crocodile Member

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    Hi again, I think I'll try both avenues. It's only a rough as bags idea of where we're at. Thanks for the heads up.

    Thanks,
    Croc
     
  6. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I have found several clients who obtained fund advice and were staggered at the value of the pension and how to "play" it. One now lives on $140K a year plus has other super paying a $60K pension. They will get that for life. The only downside is death. It passes a pension to a spouse but after that it may cease without a death benefit. In recent years the changed "cap" of $1.6m (now $1.7m) is also affected and the DB pension takes priority. Unfortunately they value a notional balance of 14 x the annual pension. Its crazy. This same basis applies whether you are 63 or 103. So a $80K pension counts to that cap as $1.12m meaning it limits tax concessions on other super if there is any. The price of wealth I guess. There are often three "old" schemes and knowing which affects some calcs. This is why the fund is best. They know it all.

    These scheme plus the old military one and the old parliamentary and judicial ones are like lotto. The pension benefit can exceed income from working and yet you dont need to work. Its like being paid not to work but dont race into retirement without planning as there are way to game a higher lifetime of income. It all in the rules. The key strategies are around boosting the FAS (final average salary) and the "points" by continuing to work perhaps and not using leave is just one way. (think of it this way $100K of unused leave increases FAS by 1/3rd or $33,333. So you get $33,333 pa for life more !! By making the FAS (at 31 December over three years) as large as possible you can max out a life of higher income.

    One downside to these fund pesion is they arent tax free. But they do get tax concessions (which now have a cap on the offset given) and paying a small amount on a large income is well worth it. The pain is needing to keep doing returns. And not getting a age pension but who wants $21K when you have $80K+ May also be worth considering if top ups are allowed and how they count.
     
    Last edited: 6th May, 2021
  7. Colonel Flagg

    Colonel Flagg Member

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    Check your SASS statement for the Pension option. My wife is NOT eligible. It depended on when you started to contribute.

    It is a Hybrid scheme with Defined benefits relating to FAS , years and extra contributing. Plus a normal accumulation account.

    Go to the SASS run seminars they run regularly. These are very good at explaining what is a complex scheme.

    Also the SASS website has a good calculator to model retirement ages, contributions etc.

    There is also the option for a Planning interview
     
  8. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Cant agree more. Every fund and even member is different and some members were in the old old scheme and others in the new old scheme and some are hybrid with DB + accum etc with the old DB quarantined with grandfathered rules which arent even mentioned in seminars etc..... One thing about DB funds is the employer and fund often have a gentlemans agreement not to promote the retirement benefits so staff all quit !! And the funds can be very tardy in explaining how to "boost" pensions until you ask them specifically. I just met with someone this am and explained this and they didnt realise working PT before retirement is a BAD idea. They are off to seek fund guidance on how to boost their pension over the next 2-3 years.

    The seminars are good for basics to help base knowedge but the benefits are best then given the planner guidance. Seminars wont mention the old scheme rules as they are specific to a small cohort and with varied rules. eg SAAS has four old schemes or more.