NetActuary

Important Pre 30th June, 2020 Pension Checks

If a pension does not meet the minimum drawdown requirements, then one loses the current pension income exemption from the beginning of the financial year. Consequently, despite the revised minimum pension drawdown amounts announced in response to the Covid-19 crisis, it is important to check this for each pension in the next couple of weeks.
To assist with the calculations, the "Actuarial Services” tab of the NetActuary website has both ABP and Market-Linked Pension minimum drawdown calculators. These have been updated for the Covid-19 reductions.

Some clients may still be relying upon a legacy pension to provide asset test exempt advantages and (hence) a higher Centrelink Age Pension. Reduced 30th June, 2020 market value could see adequacy requirements not being met and therefore the loss of this status. The lifetime legacy pension reserve calculator has been updated for the latest mortality tables and reduced cash returns. NetActuary has a service focus on these legacy pensions and our $220 inclusive of GST fee must be the lowest in Australia!

The data requirements are simple – the last actuarial report and draft accounts. However, before the end of the year, if you let me have some information, I will check them for you for no cost. The time to the year end is short – but it may be in the client’s interest to take steps with reserves and crediting rates.

Hopefully the ECPI red-tape simplification will go ahead from 1st July, 2020. If you want to be certain to use the unsegregated method for the full 2020-21 financial year, consider leaving $10 in an accumulation account.

Actuarial certificates and reports have again become a core area for NetActuary. We have no wish to regain the title of largest supplier. Our aim is to be the most useful actuarial support supplier to use.

Do feel welcome to give Brian a call on (03) 9028 5002 for a chat about how we can help you and your firm.

Brian Bendzulla

The Need for Human Controlled Actuarial Certificates

The irony of NetActuary (the renamed original certificate producing arm of Bendzulla Actuarial) calling a halt on fully automated actuarial certificates is not lost on me. However, pilots of Boeing Max8 aircraft would know exactly what I mean. Efficiencies in data capture, computational aspects and report generation with digital support is good – but beyond that is not.

There is a wonderful line in the movie Sully (based on a true story about passengers surviving a crash by landing in the Hudson River). When asked why he didn’t attempt to return to the airfield, Captain Sullenberger said “I eye-balled it!”. His judgement was crucial. A QF39 flight in 2010 en-route from Singapore to Sydney was able to land back in Singapore with jet engine parts through the wing because the pilots overruled the computer which was saying it could not be done. Centrelink RoboDebt and JobKeeper costings also are good examples why leaving it totally to a computer system is dangerous!

Human judgement and control can be critical – including with actuarial calculators. Since resuming actuarial certificates we have seen many examples where a fully automated system would have failed. These include misallocations of contributions between members; inconsistencies with previous reports; classifications as commutations rather than pension payments would preserve TBC margins; pending term completions with legacy life expectancy pensions not having reserve allocations being made etc. etc. Control of segregation/unsegregated via a $10 accumulation component will be another important judgement.

Processing can still be made highly efficient for the administrators and still allow human control of the certificate generation. Will it cost more? The answer is no. The NetActuary 2020/21 processing fee is $77 inclusive of GST for ECPI certificates and $220 inclusive of GST for legacy pension adequacy reports. To get ready for 2020/21, please feel most welcome to contact Brian on (03) 9028 5002 for a chat.

 

Brian Bendzulla

Simple and Low Cost 2019/20

It’s good to have a simple, known fee that will not vary – even if the requirements of the task become more complex. NetActuary is happy to run a simple system so that advisers/administrators/lawyers don’t have to keep checking what the fee will be - the standard fee always applies.  More than that, we will follow whatever the practitioner needs for a particular case that may require a reduced fee/no fee treatment. Being a long-term, useful service provider is far more important to us than the fee received.

The fees (all inclusive of GST) that apply in 2019/20 are:

Actuarial Services
	ABP Tax Exempt % Certificate   Defined Pension Adequacy Report	$55 $220
Services for Advisors
	QROPS Tax Reports   QROPS Application including Deed   Retirement & Property Calculators   White Labelled Web Calculators	$396 $495 $132 $198
Services for Lawyers
	Family Law DB Valuations   Earnings/Super Loss Calculations   Life Interests	$385 $440 $440

Of course, we undertake many other exercises and actuarial calculations, however the above covers the bulk of requests from practitioners. We undertake no financial planning work so there are no potential (actual or perceived) conflicts of interest. All work will be undertaken by a fully qualified actuary. We invite and encourage users of our services to feel most welcome to discuss with us any esoteric aspects to ensure a good outcome for clients.

Brian Bendzulla

 

Family Law Superannuation Information

NetActuary has been building a database of information that will be useful for practitioners (there is a link under the Lawyer services tab_. A big thank you to people who have supplied information – either via the comments box on the database application or separately by email.

At times, the situation can be quite complex. Take UniSuper (for example). Special valuation methods and factors apply for certain deferred pensions and disability benefits, but not for other defined benefits. The member may have pure accumulation benefits or a mixture of a defined benefit and accumulation component. The administrator may supply the value that can be used for the matrimonial property pool – or simply the information for a valuation. Also, where there is a value shown, it could be the value of a voluntary withdrawal and not the prescribed Family Law value. The database helps with issues such as this, besides fees; which form to request information; addresses etc.

Another thing we are working on is a generic calculator which will assist people to understand the impact of a splitting agreement. Further benefits continue to accrue as normal and eventual Age Pension entitlements may be larger due to reduced assets. One is tempted to say: “settle first and work out the future after that”, however, some people’s willingness to settle seems to need a knowledge beforehand of the future financial impact.

Brian Bendzulla

Time To Roar Again!

I have greatly enjoyed undertaking exempt percentage and adequacy actuarial calculations over the past year. Consequently, NetActuary has decided to focus in 2019-20 on becoming the pre-eminent supplier of legacy pension actuarial reports. This blog outlines how that is going to be achieved.

Firstly, noting that the top three suppliers charge $396, $439 and $440 inclusive of GST - the NetActuary fee will be $220 inclusive of GST.

We don’t mind if you send us only the legacy pension work. I have the advantage of remembering very clearly the heighday of these pensions. NetActuary is also going to increase the number of support tools for this area. Already, there is an actuarial calculator so that you can monitor how liabilities have moved. Another calculator is about to be loaded that helps the administrator set the next year market-linked pension payment amount. This is because we notice where the remaining term is not a whole year, occasionally the wrong round up and down rule is used.

We are very happy to work with advisers to wind up these legacy arrangements – or deal with under/over appropriate reserve issues.

NetActuary needs very little information from you to undertake this work – just the most recent actuarial report and a draft set of accounts – that’s all! However, there are Excel data forms on our website if you prefer.

Please drop us a one-line email if you would like your email added to the proactive material we send out on this area. Capped defined benefit income streams have their own administrative and advice challenges.

 

Brian Bendzulla

New Offices and Telephone Number

We have enjoyed the many years that NetActuary have operated from Salamanca Place, however it is becoming increasingly difficult for clients to find parking and to access the offices  –  especially during times when events such as Salamanca Market, Dark MoFo and The Taste of Tasmania are taking place.  

Consequently, we have purchased delightful offices at 4/19a Hunter Street in Hobart (on the other side of Sullivan’s Cove) in the award-winning Henry Jones IXL complex.  This area has the new cruise terminal, MACq 01, The Henry Jones Art Hotel, Hotel Grand Chancellor etc. (and the coffee is just as good “on the other side”!)

Our new telephone number is (03) 9028 5002.  These details are on the NetActuary website.

The NetActuary Team

Autumn Tidy Up SALE

As we head towards the end of the financial year, the number of tax-exempt income percentage and Legacy Pension adequacy certificates also runs down. As our encouragement to complete the remaining outstanding SMSF tasks, we offer an excellent value offer on actuarial certificates until 30^th June, 2019 – $55 (including GST) for section 283 exempt income percentage actuarial certificates and $165 (including GST) for legacy pension actuarial reports.

In the post Royal Commission world, more than just price and speed are important with these services. We have supplied additional comments in covering emails where something should be considered that would be in the client’s best interest. This may be a life expectancy term pension that needs to consider possible actions before the term runs out or where more than adequate reserves can be put to work to generate retirement income. With the normal s283 certificate, there have been numerous discussions to assist with issues such as
whether a TRIS is in retirement phase or not – besides the part year segregation aspects. NetActuary will always have the actuary signing the certificate being the person undertaking the calculations.

It has been very gratifying to see how many past clients have again used the NetActuary actuarial certificate service since we recommenced this work. As part of the certificate service, we provide a complete support role.

The links to the data forms are:

• Click here for ECPI Excel form
• Click here for ECPI pdf form
• Click here for Defined Pension adequacy reports.

Many of our clients simply provide draft accounts, the general ledger and past certificates rather than filling in forms.

Please feel very welcome to phone Brian on (03) 9028 5002 to chat about how we can make this task simple and convenient for you.

Brian Bendzulla

Secure Web Calculators

An encrypted internet connection was once only used for payment systems. One knows the connection is secure when a padlock and https:// appears in the address bar. Google Chrome has started to mark all HTTP sites as “not secure”. Google is also down-ranking unencrypted sites in the search engine. Apple Safari browser is going to follow. Consequently, NetActuary has migrated all web calculators and reference pages to a secure host.

Secure sites have an SSL certificate. This has a public and private key that work together to establish an encrypted connection. The increased processing power needed to run encryption has no noticeable response time difference for the web calculators. With the commercialization of the internet, I think we need to accept that the days of http/unsecured connections are numbered. Hopefully, some of the internet scams are driven out at the same time.

 

If you are a user of our branded calculators, what do you need to do? Nothing immediately. They have put redirects on all existing links. However, when you do a website update/maintenance you may like to point directly to the https://netactuary.support/ links. An installation note is available.

 

Brian Bendzulla

Family Law Super Info

With matrimonial property settlements, superannuation entitlements can be a significant proportion of total assets. It would be very useful if Family Law practitioners had a single place to check items such as information on fees payable; addresses to send requests; whether special methods and factors apply; types of splitting available; whether the trustee/administrator provides defined benefit entitlements; etc.

NetActuary has created a web database infrastructure to solve this need. A link on the Lawyer tab reference panel will take you to a page shown here.

Much work still exists to build all the content. At the moment, the fund details loaded are mainly defined benefit special methods and factors funds. We will work on expanding this. However, it can also be a collaborative effort. On the web page is a quick “submit comments” for information which you have come across.

We are also developing a useful resource for legal practitioners working in the tort law area. More about that in a separate blog item.

Brian Bendzulla

Pre-Christmas Sale!

We have really enjoyed helping administrators and trustees with defined pension actuarial reports this year.  We have our systems and procedures fine tuned and have decided to pass that efficiency on in the form of a permanent reduction of the fee to $275 (inclusive of GST) per report.  However, there is one final period up to the Centrelink end of year cut off to finish any remaining outstanding adequacy and tax-exempt percentage reports for these legacy pensions.  Until the end of December 2018 we offer what we believe is the lowest fee for this service in Australia - $220 inclusive of GST!

There are a number of additional advantages in our service.  In the actuarial report return email we have been commenting upon issues that the client could consider which could enhance the structure and appropriateness of their retirement arrangements.  We need no data forms filled in – simply email us the previous actuarial report and the accounts trial balance.  If you would like to take up this offer, email them through and we will get the reports back to you quickly.

If you would like to discuss any aspect of this, please ‘phone Brian on (03) 6224 1145.