‘Rural, Island & Dispensing Doctors of Ireland 28 th Annual Conference 5 th October 2013 ‘Pension Issues’ Dr. Anthony Lundon Chairman Trustee GMS Superannuation

‘‘Rural, Island & Dispensing Rural, Island & Dispensing Doctors of IrelandDoctors of Ireland

2828thth Annual Conference Annual Conference55thth October 2013 October 2013

‘Pension Issues’‘Pension Issues’

Dr. Anthony LundonDr. Anthony Lundon

Chairman Trustee GMS Superannuation Chairman Trustee GMS Superannuation FundFund

TrusteesTrustees Dr. Anthony Lundon Dr. Anthony Lundon - Galway- Galway Dr. Eugene Swaine Dr. Eugene Swaine - Dublin- Dublin Dr. Jim Molloy Dr. Jim Molloy - Limerick- Limerick Dr. Philip Murray Dr. Philip Murray - Sligo- Sligo Dr. Niall Walsh Dr. Niall Walsh - Longford- Longford Dr. Martin Healy Dr. Martin Healy - Cork- Cork Dr. Fergus Macnamara Dr. Fergus Macnamara - Waterford- Waterford Dr. Damian RutledgeDr. Damian Rutledge - Dublin- Dublin Dr. Larry Mc McEntee Dr. Larry Mc McEntee - Meath- Meath Dr. Michael KelleherDr. Michael Kelleher - - I.M.O. GPI.M.O. GP Comm Trustee Comm Trustee Corporate TrusteeCorporate Trustee

Administrators – MercerAdministrators – Mercer

Corporate Trustee – Irish Pensions Corporate Trustee – Irish Pensions TrustTrust

PensionsPensionsWhat?What?Types:Types:

- - DB (Defined Benefit) SchemesDB (Defined Benefit) Schemes- DC (Defined Contribution) - DC (Defined Contribution)

SchemesSchemes

PensionsPensions PrivatePrivate GMSGMS AVC’sAVC’s Salary + GMSSalary + GMS Old Age Pension/OtherOld Age Pension/Other

GMS Superannuation GMS Superannuation FundFund

1988/9 – Pensions Negotiated & 1988/9 – Pensions Negotiated & CapitationCapitation

- HistoryHistory- IdealsIdeals- BenefitsBenefits


Benefits:Benefits: 1. Pension – GP & 1. Pension – GP & SpouseSpouse

2. Illness Benefit2. Illness Benefit

3. Death in Service Benefit3. Death in Service Benefit


PensionPension: “Options on retirement”: “Options on retirement”

- Dr: Cash lump sum & - Dr: Cash lump sum & pension or pension only. pension or pension only.

(note revenue limits)(note revenue limits)

- Dr only Vs Dr & Spouse- Dr only Vs Dr & Spouse


- GP’s - Fund Value- GP’s - Fund Value - Contributions & Bonuses- Contributions & Bonuses

- Bonus: +/-- Bonus: +/-

- 2012 bonus 6.9%- 2012 bonus 6.9%

AVCsAVCsAdditional Voluntary Additional Voluntary

ContributionsContributions WhatWhat HowHow WhenWhen Tax efficiencyTax efficiency


AVCsAVCsSpecified percentage – Specified percentage – Aged under 30 – Aged under 30 –

15%15%

Aged 30 to 39 – 20%Aged 30 to 39 – 20%

Aged 40 to 49 – 25%Aged 40 to 49 – 25%

Aged 50 to 54 – 30%Aged 50 to 54 – 30%

Aged 55 to 59 – 35%Aged 55 to 59 – 35%

Aged 60 or over – Aged 60 or over – 40%40%


Release of bonuses: +/-Release of bonuses: +/-

- Active members- Active members

- Retired members- Retired membersFour year smoothing Four year smoothing systemsystem


Effect of Pensions Effect of Pensions LevyLevy

Options within funds Options within funds close to retirementclose to retirement


- - Your pension: Your pension:

GMS fund Vs Insurance IndustryGMS fund Vs Insurance Industry

E.G. E.G. Fund of €500,000 as of 31/12/12Fund of €500,000 as of 31/12/12

Report on Pension ChargesReport on Pension Charges

Publication announced on 23/10/12 Publication announced on 23/10/12

by Joan Burton,by Joan Burton,

Minister for Social ProtectionMinister for Social Protection

Individual pension charges expensiveIndividual pension charges expensive

- Loss of up to 30%- Loss of up to 30% Occupational : Loss of up to 15%Occupational : Loss of up to 15%


31/12/12 - Fund of €500,000. 31/12/12 - Fund of €500,000.

GP 65 yrs & 2/3 Spouses GP 65 yrs & 2/3 Spouses pensionpension

Pension PAPension PA IncreasesIncreases

GMS planGMS plan €€25,50025,500 If fund can If fund can afford itafford it

Insurance Insurance companycompany

€€21,50021,500 NoneNone


€€15,00015,000 Pension Pension increases with increases with inflation (CPI)inflation (CPI)


31/12/12 - Fund of €500,000. 31/12/12 - Fund of €500,000.

GP 70 yrs & 2/3 Spouses GP 70 yrs & 2/3 Spouses pensionpension

Pension PAPension PA IncreasesIncreases

GMS planGMS plan €€29,00029,000 If fund can If fund can afford itafford it


€€25,00025,000 NoneNone


€€17,00017,000 Pension Pension increases with increases with inflation (CPI)inflation (CPI)

GMS Superannuation FundGMS Superannuation FundPerformance UpdatePerformance Update

YearYear Actual Actual Fund Fund

ReturnReturn

Declared Declared ReturnReturn

Pension Pension IncreasesIncreases

CPICPI

20072007 -1.9%-1.9% 13.7%13.7% 6.7%6.7% 4.9%4.9%

20082008 -32%-32% -8.0%-8.0% 0.0%0.0% 4.1%4.1%

20092009 20.0%20.0% -5.5%-5.5% 0.0%0.0% -4.5%-4.5%

20102010 5.1%5.1% -5.2%-5.2% 0.0%0.0% -1.0%-1.0%

20112011 -4.5%-4.5% -9.4%-9.4% 0.0%0.0% 2.6%2.6%

20122012 +12.2+12.2%%

6.9%6.9% 0.0%0.0% 1.7%1.7%

2013(YTD2013(YTD))

+7.9%+7.9%


2011: Marks end of negative 2011: Marks end of negative bonusesbonuses

2012: Fund now fully funded &2012: Fund now fully funded &

positive outlook for future.positive outlook for future.

- Markets vary- Markets vary

- Investment Strategy - Investment Strategy diversifieddiversified


Pension ProtectionPension Protection

- Premium Waiver Scheme- Premium Waiver Scheme

Permanent Health InsurancePermanent Health Insurance

Politics and PensionsPolitics and Pensions

- New limits re pensions – 01/01/14- New limits re pensions – 01/01/14

Fund value ? / €60,000 per annumFund value ? / €60,000 per annum

Excluding OAPExcluding OAP

Note: 30% of AVCs may be Note: 30% of AVCs may be withdrawn withdrawn

before 27/03/16before 27/03/16


PensionsPensions - The Future- The Future

- New GMS - New GMS ContractContract

- ARF’s & GMS - ARF’s & GMS Superannuation Superannuation

FundFund

Documents

‘Rural, Island & Dispensing Doctors of Ireland 28 th Annual Conference 5 th October 2013 ‘Pension Issues’ Dr. Anthony Lundon Chairman Trustee GMS Superannuation