Superannuation

Can I choose my own super fund?

Most working Australians have the right to choose their own superannuation fund. Major exceptions include public sector employees and people employed under some State awards.

How much can I contribute to super?

This depends on the type of contribution you make.

Concessional contributions
Concessional contributions, which includes salary sacrifice contributions, are effectively an employer contribution as such, they fall within the limits that apply to those contributions. The maximum amount that is subject to pre-tax (the concessional rate) is $50,000 For those over 50, the annual limit until July 2012 is $100,000.

Self-employed contributions
If you’re self-employed you can claim a full tax deduction on super contributions you make up to $50,000 a year. If you’re over 50 this limit increases to $100,000 until July 2012.

Non-concessional contributions
These types of contributions are made from your after-tax salary so you don’t pay any contributions tax on them. You can contribute up to $150,000 in any single year, or $450,000 over a three-year period using this strategy, if you are under age 65.

What are the different types of contributions?

There are a number of ways you can contribute to super.

Super guarantee

All employers are required to provide minimum super cover for eligible employees known as the super guarantee (SG). The current SG level is nine per cent of your gross salary - for some industrial awards this level may be higher. If you’re employed full-time, part-time or on a casual basis and earn more than $450 a month your employer must make SG contributions on your behalf (some exceptions apply).

Salary sacrificing
This is a strategy where you contribute part of your pre-tax income to super. Salary sacrifice contributions usually attract a tax of just 15 per cent, about half the average marginal tax rate.

Ask your employer if you can make salary sacrifice contributions to your super fund. You may be able to contribute one-off payments like your annual bonus if you make prior arrangements.

Continuing to make salary sacrifice contributions while using a transition to retirement income stream can be a tax-effective way to top up your retirement benefit while drawing a tax-free income stream.

Self-employed contributions
Super contributions can be a great way for self-employed people to boost their retirement nest egg and reduce their company tax liability.

If you’re self-employed you can claim a full tax deduction on super contributions you make up to $50,000 a year. If you’re over 50 this limit increases to $100,000 until July 2012.

Co-contributions
This is a Government funded program to help lower income earners save for their retirement. If you earn less than $60,342 a year and make personal contributions to super, the Government will match your contributions up to a certain limit. If you earn less than $30,342 the Government will contribute $1.50 for every dollar you contribute up to $1,500 in any one year.

The Australian Tax Office will automatically deposit your co-contribution to your super account if you qualify.

Spouse contributions
Contributing to super on behalf of your spouse is a tax-efficient way for a couple to save for retirement. If you are employed and your “eligible spouse” is either not working or earns less than $13,800 a year, you can contribute to their super and gain certain tax benefits.

Personal post-tax contributions

These are made from your after-tax salary so you don’t pay any contributions tax on them. Best of all your investment earnings are taxed at the concessional super rate of 15% and you can access your super benefit tax-free when you retire. You can contribute up to $150,000 in any single year, or $450,000 over a three-year period using this strategy. (if you under age 65)

How do I qualify for the Government co-contribution?
If you earn less than $60,342 a year and make personal contributions to super, the Government will match these contributions up to a certain limit. For example, if you earn below $30,342, the Government will match $1.50 per dollar contribution to a maximum of $1,500. This reduces progressively to no additional contribution at $60,342. There is no need to apply for the co-contribution. The ATO will use details from your income tax return and contribution information from your super fund or retirement savings account to work out whether you are eligible. If you fall within the limits, the co-contribution will be calculated and deposited into your super account. It is not taxed when paid into your account because it is treated as a non-concessional contribution. The co-contribution will not be counted towards the non-concessional contributions limit.
How do I find my lost super?

You can track down your super using the Australian Tax Office's Superseeker online service at www.ato.gov.au/super or phone service on 13 28 65. You will need your Tax File Number to use this service. If your super is less than $200, you may be able to access it tax-free.

How do I consolidate my super?
1. Gather together all your most recent superannuation statements. 
If you can’t find your statements contact your previous employer to find out the name of the super fund and its contact details. Call the super fund to confirm it has your super money and ask for your member/account number.

2. Decide which super fund to invest in
Review your current superannuation investments. Compare the investment options and insurance available, fees payable and past performance. Roll your super benefits into the fund of your choice. It may be a new fund altogether. A fund that offers a range of investment options will give you the flexibility to change your strategy as your circumstances or needs change.

3. Consolidate your super

Once you have made your decision and selected the super fund you want to invest in, you can simply apply for your super to be withdrawn and rolled over into your chosen fund. Some super funds will do this for you.
When can I access my super?

You can access your super benefit tax-free at the age of 60, whether you take it as a lump sum or pension. (if you have satisfied a condition of release).

If you want to access your super as a lump sum or commutable retirement income stream you will need to be retired and of preservation age. A commutable income stream gives you the flexibility to convert your income stream into a lump sum if you need to.

Your preservation age depends on your date of birth.

Your date of birth

Your preservation age

Before July 1960

55

July 1960 to June 1961

56

July 1961to June 1962

57

July 1962 to June 1963

58

July 1963 to June 1964

59

After June 1964

60


If you are between 55 and 60 you can ease yourself into retirement under the Government's Transition to Retirement rules. This way you can continue working full or part time while drawing an income from your super.

What happens to my super if I die?

If you die the fund trustee normally pays your death benefit to your dependants or your estate. Most super funds allow you to nominate who you would like to receive your benefit in the event of your death. Depending on your fund you may be able to make a ‘binding’ or ‘non –binding’ death nomination.

  • binding nominations must be followed by the trustee. You can choose a dependant or a legal representative who distributes your benefit according to your will.
  • trustees are not bound to follow your non-binding nomination however they will use them to guide their actions.