Super Guarantee increase goal posts move again
Under the previous government the Super Guarantee (SG) was set to rise 0.5 per cent each year from 1 July 2014 to 1 July 2019. However, as of 1 July 2014, the Liberal government, as part of a deal to abolish the ‘mining tax’, extended this timeframe out to 2025. This means that the SG rate increase will stall at 9.5 per cent from 1 July 2015, rising to 10 per cent from 1 July 2021, and eventually increasing to 12 per cent from 1 July 2025.
Proposed increases to the lost member thresholds
The Government has proposed to increase the threshold at which lost superannuation accounts are transferred to the ATO. Currently at $2,000, the proposed changes see the threshold increasing in two stages; to $4,000 on 31 December 2015 and then to $6,000 on 31 December 2016.
Superannuation boost for women
Greens member of the House of Representatives, Adam Bandt, introduced the Sex Discrimination Amendment (Boosting Superannuation for Women) Bill 2014 to the House, which, if passed, would exempt from the sex discrimination law employers who make additional superannuation contributions solely for their female employees.
Unfortunately, since then, the Bill, which was designed to boost the retirement savings of Australian women, has been removed from the House of Representatives, as it lacked the support of the major parties.
Final Financial System Inquiry report released
In December the final report of the Financial System Inquiry was released, with several recommendations for superannuation including:
- That superannuation funds should be forced to tender for the right to manage hundreds of billions of dollars in default savings.
- Self-managed superannuation funds (SMSFs) should be banned from borrowing to buy assets such as property and shares.
- Super fund boards should be forced to appoint a majority of independent directors.
- That trustees should be subject to the same penalties for misconduct as directors of managed investment schemes.
- That trustees should pre-select a comprehensive income product for members’ retirement.
The Government accepted further submissions until the end of March 2015, and will announce its response to the report’s recommendations sometime in the second half of the 2015 calendar year.
Big changes to the Age Pension
As of 1 January 2015, the rules changed for the Age Pension, and all new retirement income accounts are now treated as financial assets under Centrelink’s deeming rules. As a result, many pensioners across Australian may now receive less financial support from Centrelink.
If you are unsure if this change affected you, talk to a Media Super Financial Planner* today.
*Media Super Financial Planners are authorised representatives of Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.
Superannuation pioneer Mavis Robertson passes
One of the leading forces behind the creation of Australia’s compulsory superannuation system, Mavis Robertson, died aged 84, leaving an enduring legacy in the industry.
Robertson was a stalwart figure in the super industry from the early 1980s, devoting 30 years of her working life to improving the living standards of millions of Australians in retirement.
Robertson was made a member of the Order of Australia in 1994 for services to the super industry and for peace and disarmament. She was a life member of the Association of Superannuation Funds of Australia.
Super Sorter Power Hour
The Association of Superannuation Funds of Australia (ASFA) advocated the Super Sorter Power Hour again this year, in conjunction with International Women’s Day on 8 March, urging all women to take 60 minutes out of their day to sort their superannuation.
Dedicating one hour to take action when it comes to your super could see you substantially better off in retirement. Sorting your super can be as simple as getting to know your account, making a plan to add to your balance or taking the time to track down and combine any old accounts. And you don’t have to wait until next year’s Super Sorter Power Hour – take the challenge today. For more information visit the Super Guru website.
The Government handed down the 2015/16 Federal Budget on Tuesday, 12 May 2015. There were no major developments concerning superannuation, with the most significant announcements concerning the Age Pension.
The Government proposed to increase the Age Pension asset test threshold and increase the taper rate from $1.50 to $3.00. These changes were approved in July 2015 and will take effect on 1 January 2017.
The Budget didn’t contain any changes to the taxation of super benefits, contribution caps or the preservation age.