Which scheme or account am I in?
You are probably in the Contributory Scheme if you are a Tasmanian public sector employee and:
- a permanent employee with an appointment date before 15 May 1999; or
- a temporary employee with more than two years' service who could elect to join the Contributory Scheme within twelve months of completing the two years continuous service. An election under this provision must have been made before 14 May 2002; or
- a contract employee who entered a prescribed contract of employment for a period of no less than three years prior to 15 May 1999. You must have elected to join the Contributory Scheme within twelve months of entering into the prescribed contract of employment.
Can I claim a tax deduction for my super contributions?
Most people cannot claim a tax deduction for their super contributions. To claim super contributions as a tax deduction, you need to be self-employed or substantially self-employed and satisfy certain criteria.
Can I increase my contribution rate into the Contributory Scheme?
You can increase your benefit multiple factor by increasing your contribution rate for future service or by upgrading past service to a higher contribution rate. In addition you may be eligible to purchase a period of non-contributory service.
Generally you can elect, at any time, to increase your contribution rate in multiples of 1% up to a maximum of 15% of salary. If you are a full-time employee and you increase your contribution rate from 5% to 15% of salary your benefit accrual rate will increase from 20% to 31.50% of salary for every year that you contribute at the rate of 15% of salary. If you contribute at the rate of 15% of salary for the next five years of full-time service your benefit multiple factor will increase by 1.575 (5 x 31.50%) rather than 1 (5 x 20%).
Special arrangements apply to upgrading past service to a higher contribution rate and purchases of non-contributory service.
For more information on increasing your contribution rate, upgrading past service to a higher contribution rate and purchasing non-contributory service, please read the Contributory Scheme - Improving your super fact sheet and the Contributory Scheme: Member Booklet.
This is an individual decision for each member to make. Contact us for a free personal interview to assist you in considering your options.
What is full benefits membership?
Full benefits cover is only available if you are a Contributory Scheme member with at least 10 years of contributory service or you have passed an RBF medical examination. If you are a full benefits member, your death and incapacity cover will be greater than if you were a member with limited benefits cover.
If you are a limited benefits contributor, the only cost associated with becoming a full benefits contributor is the cost of the medical examination with your doctor. More information is available in the Contributory Scheme - Member Booklet. Contact us for a medical form if you wish to become a full benefits contributor.
If I change from full-time work to part-time, how will this affect my super benefit?
Contributory Scheme benefits are calculated using your full-time equivalent salary and length of contributory service and your contribution rate. Changing to part-time work means that your service accumulates at a slower rate. You may reduce the impact of this change by increasing your contribution rate to the Contributory Scheme (maximum 15%). However this may not fully compensate for the reduction in the length of service.
In general your Contributory Scheme benefit is calculated as follows:
Final Average Salary over three years prior to exiting RBF ['FAS (3)'] multiplied by years contributed and multiplied by 20% (based on basic contribution rate of 5%).
Say Jenny had a FAS(3) of $60,000. She had contributed for 15 years at 5% as a full-time employee. Jenny's benefit would be:
$60,000 x 15 x 20% = $180,000.
If instead Jenny had worked 13 years at full-time and two years at 60% part-time, Jenny's benefit would be:
$60,000 x 13 x 20% = $156,000
$60,000 x 2 x 20% x 60% = $14,400
Jenny's total benefit would be $170,400
Please contact us to arrange for a free personal interview with one of our friendly Superannuation Consultants to assist you in considering your options. You may also read the Contributory Scheme - Member Booklet for more information.
If I am in the Contributory Scheme and my salary is reduced, how can I protect my super?
If your salary is reduced, you may apply to maintain your super contributions on the basis of your former higher salary. This application must be made within 12 months of the reduction in salary taking place. If your application is approved this would maintain your level of entitlements. RBF will advise you if your application meets the criteria. This option does not apply to situations where the reduction in salary is because of a change to part-time work.
Please contact us and make an appointment with one of our Superannuation Consultants to discuss your options.
What can I do about my super if I take leave without pay?
If you are a Contributory Scheme member you should notify RBF as soon as possible if you are taking leave without pay, to ensure that you select the most suitable option for your super during this time.
If you are going on parental leave, you can elect to continue paying contributions during this period (there are a number of options available for the payment of these contributions) or you may wish to take a 'contributions holiday'.
If you are on sick leave without pay you must continue to pay contributions however you have a number of options available for the payment of contributions.
For other types of leave without pay, you must take a 'contributions holiday', but you can apply to purchase that period of leave without pay when you return to work so that it counts towards your total service. However, you should be aware that you will have to pay your own and your employer's contribution. More information about purchasing service can be found in the Improving your super - Purchase and upgrade of service fact sheet.
You continue to be covered for Death and Incapacity benefits and are eligible to make voluntary contributions, during any period of leave without pay.
Can I take a lump sum from super when I retire?
When you reach your preservation age and retire, you may elect to take all or part of your retirement benefit as a cash lump sum payment. If you are less than 60 a cash lump sum payment may be subject to tax. Once you reach age 60 there is no tax on lump sum payments. Withdrawing all or some of your retirement savings from your super may impact your future taxation position and Centrelink entitlements.
We recommend that you seek personal financial advice from a qualified financial adviser prior to making such withdrawals.
What options are available at RBF for when I retire?
You can elect to invest all or part of your benefit in one or more of the following:
- an RBF Life Pension (subject to eligibility criteria); or
- transfer your benefit to a complying superannuation fund;
- a combination of these options.
If you purchase a reversionary RBF Life Pension, two thirds of your pension will be paid to your surviving spouse upon your death unless he or she elects to receive a lump sum;
If you purchase a non-reversionary RBF Life Pension, pension payments end when you die.
How do I choose a retirement option?
There are many options available to you. You would benefit from planning your retirement carefully before making any decision.
Contact us for a free personal interview to assist you in considering your options.
Is there tax on lump sum payments?
Your lump sum may consist of several tax components, which are taxed differently depending on your age and your scheme membership.
Contact us to find out more about the taxation of lump sum payments.
Is it true that I can't access my benefit until I reach preservation age, and are there any exceptions to this?
Current Commonwealth legislation requires that most monies put into super must be kept in super until Preservation age or a condition of release is met. The Commonwealth Government's aim is to ensure that super savings are used only when a person has retired from the workforce.
If amounts are accessed before preservation age, they are generally taxed at a higher rate. Preserved monies can usually only be accessed before preservation age in the case of death, terminal illness, permanent incapacity, severe financial hardship or on compassionate grounds. Some members may be eligible to claim their super if their account balance is less than $200.00.
For more information, please refer to our Accessing your super early fact sheet in the Forms & publications section.