LOOK­ING AT SU­PER­AN­NU­A­TION…

Hills to Hawkesbury Living Magazine - - News -

When su­per­an­nu­a­tion was re­formed by Paul Keat­ing back in 1992 it seemed quite sim­ple; em­ploy­ers made com­pul­sory con­tri­bu­tions to su­per which could be aug­mented by fur­ther con­tri­bu­tions. If a per­son had in­suf­fi­cient funds in their su­per, they would be means-tested and could prob­a­bly re­ceive a govern­ment funded age pen­sion.

Nowa­days, the sub­ject is com­plex and the ad­vents of “Sim­pler Su­per” have in­stead fur­ther com­pli­cated mat­ters. The pur­pose is still the same; to get Aus­tralians to fund their own re­tire­ment. How­ever, there are traps and penal­ties for do­ing it too well!

Ac­cord­ing to the As­so­ci­a­tion of Su­per­an­nu­a­tion Funds of Aus­tralia (ASFA), su­per­an­nu­a­tion as­sets as at Septem­ber 2016 to­talled $2,146 bil­lion, with the lion’s share be­ing in­vested via In­dus­try Funds.

ASFA noted that as­sets in My Su­per prod­ucts rose 13.6% year-on-year, whilst ac­crued de­fault amounts, mainly to the re­tail funds fell from $51.9bn to $39.6bn or about 24%. No­tably con­tri­bu­tions to funds with “more than four mem­bers” were $103 bn and very sim­i­lar to the pre­vi­ous year’s tally of $104.6bn. It seems, from the ASFA data, that most con­tri­bu­tions are em­ployer based, com­pris­ing Su­per­an­nu­a­tion Guar­an­tee or salary sac­ri­fice. Per­sonal Con­tri­bu­tions are fall­ing and this is a key con­cern. Many peo­ple do not want to con­trib­ute more than ab­so­lutely nec­es­sary be­cause of the con­stantly shift­ing reg­u­la­tory goal posts. If Aus­tralians are to pro­vide for them­selves in re­tire­ment, there must be a sense of guar­an­tee or cer­tainty in this area.

The fol­low­ing changes are part of the lat­est reg­u­la­tory shift that takes ef­fect from 1 July 2017.

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