54 / 11
Surprisingly, the easiest decision of your life
Welcome to the Marinis Financial Group's 54/11 webpage. We built this webpage in response to the number of requests for help we have had from friends and former colleagues (from Theo and Julie Marinis' time in the Federal Public Service) prior to starting Marinis Financial Group in 1998!
What we have identified is that the Federal Government had built a super scheme which relies on its ability to confuse public servants and most of them make binding decisions based on ignorance and therefore receive less income in retirement. Just about every retired public servant we know regrets their decisions.
However, with a bit of guidance we have been able to show many of our friends how to make the best decision for them and their families - financially.
The term "54/11" is often used to describe the practice of making a decision to resign from the Commonwealth Public Service before turning age 55 a strategy which effectively preserves the CSS super benefits which apply at that time.
Then possibly only one month later, after attaining age 55 (hence the 54/11 tag which applies to this strategy) a public servant advises the CSS of his or her retirement, unlocking valuable pension benefit entitlements, usually significantly more than if they simply retired at age 55!
This is due to the fact that the Federal Government's CSS scheme usually applies a significantly more generous formula to determine the pension for members who resign and preserve their benefits in the fund prior to age 55.
It has the potential to provide as much as $200,000 or more in additional retirement benefits over the pensioner's lifetime, with the effect that most Commonwealth Public Servants who are 54 and 11 months of age would often need to work an additional five years or more in their current job in order to be better off financially in retirement.
In addition, having triggered this strategy, there is nothing to prevent a 54/11 candidate making the decision to return to work in a part time or consulting role in the public service. Many are ultimately re-hired by their former departments to work on their own terms, with the opportunity to further boost their retirement incomes. Others choose to have a very rewarding career change, knowing their retirement is financially secure.
In our experience, the families of as many as nine out of 10 public servants (who are Commonwealth Superannuation Scheme [CSS] members) and including of course the members themselves – will be far better off financially by "triggering" the CSS 54/11 retirement strategy.
It is important to obtain advice to determine if a 54/11 strategy is right for you. Ideally this should be at around age 53, but any time before age 55 is not too late, if you are prepared to act decisively.
CSS members aged over 55 should not panic. Whilst they have missed the opportunity to utilise the 54/11 strategy they will however, still have significant tax and possibly future Centrelink strategies available to them. They should also seek professional advice to ensure the optimisation of their net income for themselves and their families.
Similarly, government employees affected by redundancy can also make their retirement entitlements go much further than simply receiving the standard CSS pension and the additional non-indexed pension at retirement. They will in most cases, need advice on how to do this.
Whilst the prospect of a safe, secure lifetime government pension sounds very attractive, bear in mind that such pensions are fully taxable, not Centrelink favoured and not flexible/accessible. Perhaps, post the GFC, in the light of public sector pensions being slashed in Italy, Greece, Portugal and Ireland (an improbable prospect just 10 years ago) they may also not be as secure.
By taking advice on the structure of their superannuation (and diversifying as far as possible, their basic CSS pensions) public servants can significantly increase the amount of cash they take home in retirement, reduce the amount of tax they pay and potentially have access to significant capital.
In many cases, with careful planning, public servants may also find themselves eligible for a Part Age Pension from Centrelink and therefore be entitled to a huge range of pensioner discounts on prescriptions, transport and many essential services, simply because they eventually qualify for Part Age Pensions!
Who is Marinis Financial Group?
Marinis Financial Group (MFG) is headed by Theo Marinis; an Adelaide based former ATO, Centrelink and Insurance and Superannuation Commission (ISC) staffer who is both a CPA and a Certified Financial Planner. He has more than 15 years' experience advising Commonwealth Public Servants. Theo and his wife Julie were public servants for more than a decade prior to establishing MFG. The MFG team consists of approximately 10 members of staff in full time and part time roles.
Please Google "Theo Marinis Financial Strategist"
Furthermore, we would like to invite you to click on our home page at www.marinisgroup.com.au and have a look at what we say, what we do and to meet some of the people who make up this firm.
You may also like to glance at some real life case studies (we have changed the names to protect the individual's privacy, as you would expect). The case studies are used with permission.