Important Changes in Super
September 5th, 2012 | Superannuation, Self Managed Superannuation, Financial Planning, Retirement Planning, Investment Advice.
No doubt you’ve been reading the news, hearing the industry chatter and wondering what you need to do to prepare for the upcoming reforms in super.
Changes to the superannuation guarantee
In March this year, legislation was passed that will increase the Superannuation Guarantee (SG) rate from 9% to 12%, incrementally over three years from 1 July 2013 to 1 July 2019. This measure will address issues concerned with our ageing population by boosting private and national savings.
The Government expects this measure to significantly increase retirement incomes of approximately 8.4 million Australians, increasing the pool of savings by around $500 billion over the next 25 years.
The gradual increase, detailed in the table below, will allow employers to take the increased SG contributions into account when negotiating future employee remuneration packages.
Year starting on Change %
1 July 2013 9.25
1 July 2014 9.50
1 July 2015 10.0
1 July 2016 10.5
1 July 2017 11.0
1 July 2018 11.5
1 July 2019 12.0
The SG age limit of 70 has also been abolished. This means that from 1 July 2013, employers will have to pay SG for all eligible employees regardless of their age.
Many employers will also benefit from company tax reductions, and the significant lead time will help mitigate concerns. While employers will take increases in SG contributions into account when negotiating future wage agreements, it is expected that overall real wages continue will to grow.
Here at The Quinn Group our experienced team of Financial Planners, Accountants and Lawyers can provide you with the total solution and assist you with all your superannuation requirements. For more advice about changes in super, contact Peter Quinn by submitting an online enquiry or calling us on +61 2 9580 9166 to book an obligation free appointment.
The information in this document does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. It is important that your personal circumstances are taken into account before making any financial decision and it is recommended that you seek assistance from your financial adviser.