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Welcome to the Class Super Help Video on Establishing a Pension.
During this video we will establish the pension account, establish the pension balance,
generate pension establishment minutes, complete a pension review,
generate a pension review minute and finally review the actuarial percentage for the fund.
We should always run a Period Update to the day before the pension
commencement to ensure that we are commencing pensions with the correct balance.
Period Update allocates profit and tax to the member accounts.
You should also take into consideration your Fund Policy settings regarding the calculation of Deferred Tax Assets and Liabilities.
Changes in these policies or the provisions themselves, post the pension commencement, may not always have the desired effect.
You can see that this fund's most recent Period Update has been run to 30 June 2009.
We are going to start a pension for Mrs Mary Pitts on 1 January 2010 so we should run Period Update to 31 December 2009.
So first click on the Periodic Processing menu.
Then click on the Period Updates link.
Select the relevant financial year.
Now click the New Period button.
Enter the "Period To" date.
It is always a good idea to enter a Period Description that will remind you why you have run this Period Update.
Click the Process button when you are ready.
When complete, the page will display as follows.
Lets go back to the Browse Members page.
Click the Refresh button and you can see the updated Period Update date and the new member balances.
To start drawing down a pension, a member needs to have met a condition of release.
We record these against the member.
Select the Member Transitions tab.
Right Click and Select New
Enter the Member Transition effective date.
Select the Type drop down.
In this case, Mrs Mary Pitts has retired.
Click the Save button.
Close that page.
Close the Member record.
Now we will set up the Pension Account.
Select the Members and Reserves menu.
and the New Pension Account link.
Select the Member.
Select the Pension Type.
Give the pension account a name. This must be unique for the member.
Enter the Pension's Start Date.
Click the Activate button when you are ready.
The Establish this Pension Account link will become available. Click on this.
The Establishment Type is typically the first option,
unless you are converting an Allocated Pension into an Account Based Pension.
Select the Condition of Release. This will be validated against the Member Transitions for the member.
If the pension is being set up as a Transition to Retirement Pension,
then select Attaining Preservation Age as the Condition of Release.
Select the Payment Type, either Part of the Account balance or the Full account balance.
Select the Next buton.
This page will show you the member's current balance and components on the left hand side of the screen.
On the right hand side, is what will be put towards the pension establishment.
If you have select the Payment Type as full, then you just need to select Submit on this page,
however if you have selected Partial like I did, then you must enter either the Pension Purchase Price
or the Percentage of the account balance that you want to use to establish the pension.
Click the Submit button when you are ready.
This will take you to the Pension Details tab where you can enter some static information.
such as the relevant number or Pension Term, which are typically used for Centrelink purposes.
Click save to save the inputted data.
To generate Pension Commencement Minutes, click on the Print Commencement Reports button.
This will launch the Single Report Viewer in a new tab.
Change any of the inputs you desire such as the Meeting Date.
Then click the View button to generate the report.
This will generate a Request Letter from the member to the trustee.
A minute confirming the establishment.
And a letter to the member from the trustee confirming the establishment.
So you can save this report to PDF or print it. When you are finish, close the Single Report Viewer.
Now lets complete a Pension Period Review for the pension.
Click on the Create a New Period Review for this account link on the Pension Establishment page.
Select the Payment Frequency.
Indicate whether this review is interim or final. Interim should be used where you have completed a
pension review based on interim member balances and you intend on coming back
and updating the pension review once the member balances are finalised.
You can see the minimum and maximum calculations which the system will do for all Account Based Pensions.
Now select whether the client will be taking the minimum or a Selected amount from the pension.
If you have chosen Selected, then enter the Selected Amount.
Hit the calculate button and the system will determine whether any Pay As You Go Withholding
is required, based on the member's age and proportion of taxable component in the pension.
Click the save button to save this pension period review.
The Print Minutes button will now become available.
This will launch a Single Report Viewer in a new tab.
Adjust any of the report parameters as required and then click the View button.
Close the Single Report Viewer when you are finished with it.
Now we should review the Actuarial Percentage for the Fund to ensure we have a good estimate input.
Click on the Fund menu.
Then the Fund Details link.
Select the Fund Policies tab.
Right click and select New.
The new fund policy will bring forward all the same details as the previous fund policy, except for the Start Date.
Enter the Start Date for the new fund policy. Your actuary is likely to give you a percentage
that will cover the full financial year, so typically the Fund Policy start date will be a 1 July.
Now enter your new Actuarial percentages. The first percentage
is what will apply against the income and is what the actuary will supply to you.
And the second percentage is for expenses, where some people use their own derived percentages.
Please note that I have calculated these actuarial percentage estimates myself.
Once the actuarial certificate is received, I will update this Fund Policy.
Click Save once you are done.
You will always get this pop-up warning when creating or editing a Fund Policy.
This is advising that the changes to the Fund Policy that you have
made will not change any existing transactions or period updates.
Your new Fund Policy will only apply to new or edited transactions or period updates processed.
So click the OK button.
And that is all of the steps of a Pension Commencement. Thank you for watching.
If you require further assistance with this or any other feature,
please contact the Class Super Help Desk on 1300 851 057.