There is no doubt we have an ageing population in Australia and that impacts onAvSuper’s members and  the superannuation industry, as well as the wider community.

The Association of superannuation funds of Australia (ASFA) has recently produced a white paper providing a commentary on how the super system may need to evolve to accommodate the ageing population.

 The paper is certain to provide discussion and generate a number of different views about the best suggestions for the future.  We welcome the opportunity to consult on this in the coming months and remind our members that this is an important issue on which we welcome your views.

While we welcome discussions about super and preparing for the future, the white paper is produced by ASFA and may not necessarily reflect our view on the issues raised.

AvSuper’s position

AvSuper is reviewing the white paper prepared by ASFA and considering it’s impact on our members. We’ll form an ‘AvSuper view’ in due course, however in  the meantime, we welcome comments from our members to help develop our view and course of action.

Your opinion is valuable to us

ASFA’s white paper has been publicly available so funds and members can comment on it, make suggestions and influence the final position taken by ASFA.

You can log comments on AvSuper’s facebook page, email us with your thoughts or send them directly to ASFA if you prefer. 

 We encourage AvSuper members to take this opportunity to have a say in how the future of retirement policy in Australia may look – its your super and your retirement!   So, how do  YOU think retirement and saving for  YOUR retirement should look  in the future ?

The Government released its federal Budget on Tuesday, 14th May.

We have prepared a fact sheet outlining the main super changes proposed in the Budget along with a commentary on how those changes may impact AvSuper members.

Calculating the impact of the Budget on your super is an individual process

The impact for you 

While the Budget doesn’t contain a lot of changes to superannuation, the proposed changes may have a significant effect on some members.

The scope of the proposed changes is such that different groups of members are likely to be impacted in different ways so it is important to review the Budget, and the related legislation as things progress, in line with your personal situation.

Before making major decisions about your super and/or retirement income stream, please remember these changes are not yet law and may well be altered and delayed. We suggest you get personalised advice from our Member Advice Consultants to better understand your options and their implications.

We are pleased to announce that superannuation savings  will soon be able to be moved between Australia and New Zealand

The Federal Government recently passed legislation which is effective 1 July 2013 and will provide for eligible persons to be able to consolidate their retirement savings between Australian superannuation funds and KiwiSaver schemes in New Zealand.

Given the ease of moving between these two countries, the ability to move your retirement savings  when you leave Australia or New Zealand will be useful for  many members currently unable to transfer their benefits between these countries.

If you would like further information about this change and how you may be able to consolidate your super savings between Australia and New Zealand, please contact us on 1800 805 088.

The Federal Government included some super updates in the Mid Year Economic and Fiscal Outlook 2012-13 (referred to as a mini budget by many people) released on 23 October 2012. However, these updates do not impact on the basic tax structure of the system.

The key areas affected are:

• Delay in the start of SuperStream
• Income stream tax exemptions continue after death
• More accounts will be transferred to the ATO
• Reduced SuperStream levies to funds

You can read a complete summary of the proposals, along with our comments about the impact for AvSuper members.

Legislation relating to Stronger Super has now been passed by both houses of parliament which will introduce a higher governance standard for many super funds and trustees.

The Superannuation Legislation  Amendment (Trustee Obligations and Prudential Standards) Bill 2012  includes three major changes:

1. a requirement for Trustees to put the members’ interests first at all times
2. outlining specific trustee duties for Directors, such as acting honestly and in member’s best interests
3. allowing APRA with power to make prudential standards for super, giving it the same power over super funds as it already has over banks and insurance companies

How this impacts on AvSuper members

The AvSuper Trustee broadly sees these as positive enhancements  for many super funds, but  we remind our members that as a profit for members super fund, AvSuper already meets  the majority of the proposed changes, in particular requirements  to act only in the best interests of Fund members.   At this stage we expect to be able to meet the new requirements easily within our existing Fund Governance framework, with no material impact for members.

We’ll provide more detail on the proposed changes in our Annual Report to members, (expected to be issued later in the year, together with your annual member statement) and we will continue to keep you informed as the Stronger Super reforms take shape.  However, as always, please contact our Member Advice team if you have any specific queries.

Michelle

Michelle Griffiths
CEO

From 1 July 2012, the concessional cap (ie the maximum contributions you can make to your super account at concessional tax rates) will be $25,000 for all members.

The Government has advised that the higher ($50,000) interim cap, which has applied to date for members aged over 50, will also cease.  This means that there is limited time left (up to 30 June) to take advantage of the higher caps if you are over 50.

Grandfathering provisions will still apply for defined benefit members but we encourage you to call us if this applies to you to ensure you understand what this means.

The Government has deferred the start date of its 2010-11 Budget measure to increase the concessional contributions cap for superannuation members aged over 50, with less than $500,000 in superannuation savings.  We will continue to work with industry groups to lobby for this change to be implemented on your behalf, and of course will keep you informed of developments.

Given the significance of this change in a very short timeframe, and the potential for members to be ‘surprised’ with higher tax on their extra contributions (if they breach the cap), we’ll also be directly contacting most members affected by the change to provide assistance with reviewing their contribution strategies.

Our Member Advice Consultants are available to help you make decisions about contributions to your AvSuper account so please contact us with your questions.

Michelle

Michelle Griffiths
CEO

We’re pleased to provide members with AvSuper’s overview of the Federal Government’s 2012 Budget to help you understand the likely impact on your super.

Whilst the Budget did not include a lot of changes to super, those that were included could have significant impact for certain groups of members. We have produced a fact sheet outlining the super aspects of the Federal Budget, including two of the main changes:

•  a deferral of higher concessional contribution caps for older members
• introduction of a higher super contributions tax for very high income earners

AvSuper members who want a better understanding of how these changes may impact them personally are reminded of the free appointments with our member advice consultants.

The Federal Government has announced that the reduced minimum drawdown for income stream members has been furthered extended to 30 June 2013.

Current Legislation stipulates that a minimum amount must be drawn down (withdrawn) from super-based pensions or income streams at least annually. The minimum amount is determined by the member’s age and account balance each July.

The Government introduced some drawdown relief to income streams in 2009 and reduced in 2011.

The relief has again been extended another year to assist retirees rebuild after capital losses while the market was low. This means income stream members can withdraw 75% of their legislated minimum for the 2012-13 financial year.

AvSuper members who have already requested drawdowns based on the reduced minimum will automatically continue on that level. Annual income stream drawdown letters will explain how all eligible members can access this reduction for 2012-13. If you wish to take advantage of the drawdown relief extension for 2011-12, please make use of this Pension Relief Form.

New legislation has been passed to effectively remove the tax on super contributions for low-income earners.

From 1 July 2012, people earning less than $37,000 pa will receive up to $500 in their super account from the Government.

The payment amount will be 15% of the concessional contributions made to the person’s account, up to a maximum of $500.

This is separate to the co-contribution so eligibility for one does not influence the other.

The biggest superannuation question for most people is ‘how much do I need to save for my retirement?’

While there is no simple answer as we all have different needs and goals, there are some guidelines available to help you set your super goals. The Association of the Superannuation Industry of Australia (ASFA) reviews these guidelines each quarter to allow for movements in living costs for retirees.

For some time, living costs have increased and therefore the amount of money estimated to be required for retirement also increased. However, living costs overall decreased during the December 2011 quarter; the decrease was small (0.1% for a couple living comfortably) and therefore similar to the ‘no change’ to CPI for the same period.

We list and update these figures on our site each quarter.

For help in deciding if you need more super or how to build your super faster, why not call our Member Advice Consultants for help? It’s free personalised advice on your super for all AvSuper members up to 3 times a year.