personal pension plans - microsoft › libx-131... · pension plan with profits in total you will...
TRANSCRIPT
PersonalPensionPlans
www.laferla.com.mt
GroupPersonalPensionPlans
1 Why save for retirement?
2 How Personal Pension Plans Work
3 Investments
Next Steps
SustainabilityofStatePensions?
Thecurrentsystem“suffersfrombothissuesoffiscalnon-sustainabilityandlowpensions
inthelongrun”TheMaltesePensionsSystem,AnAnalysisOfTheCurrentSystemAnd
OpDonsForReform,WorldBankReport,2004
StatePension
1. StatePensionAge
2. TwoThirdsPensionq TheStatePensionisbasedonamaximumoftwo-thirdsofyourincome,howeverthereisacapcalledthe
MaximumPensionableIncome
3. MaximumPensionableIncomeq ForthosebornaRer1961itis€21,749
4. MaximumStatePensionq PeoplereDringtodaycanreceiveamaximumof€11,895p.a.=€229perweekq ThosebornaRer1961willbeabletoreceiveupto€14,500p.a.=€278perweekor€1,200permonth
Yearofbirth StateRe7rementAge YearofRe7rement
1952–1955 62 2014–2017
1956–1958 63 2019–2021
1959–1961 64 2023–2025
1962onwards 65 2027onwards
Incomeinre7rement
1. Howmuchwillyouneed?q Verypersonalandvariesaccordingtoyourcurrentsalaryandlifestyle
q Generallyyouneedtwo-thirdsoftheirsalaryinordertomaintainyourlifestyle
q ThecurrentStatePensionwillprovideuptotwo-thirdsforthoseearningupto€21,700,but:
a. Willthisbesustainableinthefuture?b. Whatifyouearnmorethanthis?c. Whatifyouwantmorethantwothirds?
2. Possiblesourcesofincomeq Property?Eitherasaninvestmentorbysellingyourhome?
q Savingsandinvestments
q PersonalPensionPlans(asavingsplaneligiblefortaxrebates)
HowdoPensionPlanswork?
1. ContribuDons2. Benefits3. Investments
HowPersonalPensionPlansWork
PENSIONFUND
CONTRIBU
TIONS15
%TAX
REB
ATE
PENSIONFUND
PENSIONFUND
PENSIONFUNDAT
RETIREMENT
CONTRIBU
TIONS15
%TAX
REB
ATE
15%TAX
REB
ATE CO
NTRIBU
TIONS
REMAININGFUNDTO
PROVIDEANINCOMEFOR
LIFE
UPTO30%TAXFREECASH
BeginSaving WorkingLife ReDrementAge
AWORKEDEXAMPLE
35YEARSOLD
65YEARSOLD
SAVINGSOF€1000PERYEAR
MSVPERSONALPENSIONPLANWITHPROFITS
Intotalyouwillhavesaved€30,000andreceived€4,500intaxrebate
Thetotalcostistherefore€25,500
Atage65,assuminga3.5%investmentreturnweproject:
FUNDSIZE €54,419
TAXFREECASH €16,326
ANNUALPENSION €2,476assuminganannuityrate
of6.5%
AWORKEDEXAMPLE
Inthisexampleitcostsyou€25,500.Yougetback€16,326asalumpsum,andthenreceiveapensionforlifeof€2,476
i.e. you receive all your money back by age 69, but then continue to receive a pension of €2,476 p.a. for life"
Benefitsinre7rement
1. Youmaytakeupto30%asatax-freelumpsum
2. Thebalanceistobetakenasanincomeq TheamountofincomeyoureceiveinreDrementwilldependonthesizeofyourpensionplanand
annuityratesatthatDme(interestrates)q YouwillhavemanyopDonsastohowtheincomeispaidbutwillbeofferedtwomainchoices:
Annuityq Providesaguaranteedincomefortherestofyourlifeq YouwillhavetheopDonfortheincometoconDnuetoyourspouseq Youmayalsochoosetoprotecttheremainingvalueforyourheirs
ProgrammedWithdrawalsq Enablesyoutokeepthefundinvestedq Youwithdrawanincomeeachyearq IncomenotguaranteedforlifebuthasthepotenDaltoincreaseoverDme
Thechoiceofincomeismadeatre7rement–notnow
INVESTMENTS
• Providescapitalguarantees• Offerssmoothedreturnsintheformofannualbonuses• Bonusesaretaxfreeinthehandsofthepolicyholder
4.50% 4.50% 4.50%
3.80%3.45% 3.45%
2.45%
3.10%3.35% 3.35% 3.25%
0%
1%
3%
4%
5%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
MSVWITHPROFITSFUND
Bonus performance – past 11 years:"
CommonQues7onsAboutPersonalPensions
1. HowdoIgetthetaxrebate?q MSVLifenoDfiestheInlandRevenueDepartmentoftheamountyouhavecontributed.q TheIRDsendsyouacheque(employed)ormakesadeducDonfromyourtaxcomputaDon(self
employed)equalto15%ofthecontribuDon.
2. WhathappensifIdie?q IfyoudiebeforereDrementthefullfundvalue(yourpremiumsandbonusesearned)plus1%is
payabletoyourheirs.q DeathaRerreDrementdependsonwhatincomeopDonsyoumakeatreDrement.
3. IalreadyhaveanMSVReDrementPlan,willIlosethat?q MSVisofferingtheopDonforyoutostoppayingyourreDrementplanpremiumsandbegina
pensionplanfromtodaywithnopenalDes.ThepremiumsinvestedinyourreDrementplanwillremaininvestedandconDnuetoaccumulatebonuses.Wesuggestthatyoutakeoutapensionplanandtakeadvantageofthetaxefficiency.PleaseaskLaferlatoguideyouonthis.
4. WhatifIwanttosavemorethan€1,000peryear?q Wesuggestsaving€1,000peryearinaPersonalPensionPlan,tomakethemostofthetax
advantages.Ifyouwishtosavemore,wesuggestinvesDnginanMSVFlexiPlan.ThisisbasedonthesamefoundaDons,butwithoutthetaxcreditandwiththematuritybeingpaidoutfullyasatax-freelumpsum,insteadofanannuity(regularincome).PleasecontactLaferlaformoreinfo.
KEY FEATURES OF THE PLAN
TAXREBATE
Eligiblefora15%taxrebateonyourcontribuDons
COMPLETEFLEXIBILITY
CompleteflexibilitywithregularcontribuDons:• Increase• Decrease• Stop• RestartAllwithoutanypenalDesorcharges
TOPUPS
AbilitytoincreaseyoursavingsbypayingalumpsumatanyDme
INVESTMENT
MSVWithProfits–CapitalGuaranteed
DEATHBENEFIT
101%paymentondeathbeforereDrement
PENSIONINCOME
Pensionincomepayableforlife
LUMPSUM
Upto30%ofthefundvalueasalumpsum
PersonalPensionPlansSummary
KeyFeatures:q DesignedtosupplementtheStatePensionwhenyoureDreq PersonalcontribuDonseligiblefor15%taxrebatefromtheGovernmentq Planisinyourownnameq Youkeeptheplanevenifyouchangeemployerinthefutureq Benefitscanstartbetweenage50and75q AtreDrement:
q Upto30%availableasatax-freecashlumpsumq Balanceorproceedstobetakenasapensionincome
q ContribuDonscanbeincreased,decreasedorstoppedatanyDmeq Investments
q MSVWithProfits–offeringcapitalguaranteesandsecurity
“Someone’ssirngintheshadetodaybecausesomeone
plantedatreealongDmeago.”
WarrenBuffe*
PersonalPensionPlans
ContactKeithLaferla
Phone:20939342|E-mail:[email protected]
WestronglyadvisethatyoureadtheKeyFeaturesDocumentandthePolicyDocumentthatoutlinethetermsandcondiDonsofyourplan.TaxlegislaDonandtheamountofrebatesyoumayreceiveinthefutureissubjecttochangeandisnotguaranteed.LaferlaHoldingsLtd.isanenrolledTiedInsuranceIntermediaryundertheInsuranceIntermediariesAct,2006forMSVLifep.l.c..MSVLifep.l.c.isauthorisedbytheMaltaFinancialServicesAuthoritytocarryonlongtermbusinessundertheInsuranceBusinessAct1998.BothcompaniesareregulatedbytheMFSA.