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FAQ`sHow much should I be contributing into super? How much should I be contributing into super? Obviously, no one can say for sure exactly how much money you'll need and the answer will be different for each individual. Basically, it comes down to how much income you'll want when you're no longer working. If you're intending to rely on a government age pension be prepared to live frugally. The current pension for a single person is worth 25% of average weekly earnings. You have to ask yourself, is this enough to provide the vision you have for your retirement years? As a rule of thumb, many financial planners suggest people should aim for a retirement income of between 50% and 70% of pre-retirement salary/wages. For example, if your salary before retirement was $40,000 a year and you set a retirement income target of 60% of your pre-retirement salary, you will be looking at a figure of $24,000 per annum. Regardless of what your final salary is, if you want a retirement income equal to about 60% of final salary, it is estimated you will need to save around 15% of your salary/wages for 40 years. While the government makes it compulsory for your employer to contribute super on your behalf, it is at the rate of 9% of your salary/wage. Determining the lifestyle you want for your retirement will help you work out if relying on the government age pension and employer super contributions will provide the income you will need. Making personal contributions to your super can make a big difference to your retirement benefit, particularly when you start early. So the sooner you start to invest, the more you can end up with and the less you'll need to save later. What happens to my Salarylink benefit if I decide to reduce my hours and go part time? Reducing your hours will not impact the Salarylink benefit you have already accrued. If I reduce my work hours will my Final Average Salary be affected? For further information regarding Salarylink and the calculation of benefits, please refer to the Salarylink Product Disclosure Statement or contact Local Super directly. Can I nominate who will receive my super if I die? In the event that you die while a member of Local Super, the payment of your superannuation benefit (including any applicable insurance proceeds) must be made in accordance with superannuation law and the Scheme Rules. Local Super members have the option of nominating a beneficiary(ies) in one of two ways:
In this instance the Board has the final discretion to pay your super benefit to any one or more of your dependants and/or legal personal representative in any proportion it determines. The Board will, however, take your wishes into account provided you have nominated your dependants and/or legal personal representative on the relevant form. Binding nomination This requires Local Super to pay a super benefit (including any applicable insurance proceeds) to the person(s) nominated on your form as long as they are a valid beneficiary. The nomination must be updated every 3 years. In the instance that a Binding nomination is not updated within this specified time, the nomination lapses and is no longer binding on the Board. There are certain guidelines set out in legislation that restrict who your benefit can be paid to, but in general, payment would be made to a dependant(s) which can be one or more of the following:
*Please refer to the relevant PDS for your membership for the definition of 'Interdependency relationship' or contact Local Super directly for further information. Where the benefit is paid to your estate it will be distributed in accordance with the provisions of your Will. To help make the process of identifying your dependants it is important to provide the nomination of your beneficiaries to the Board. Contact Local Super for the relevant form or you can download it from Forms and Documents. What happens if Local Super doesn’t have my Tax file number (TFN)? Thought it’s not compulsory, from 1 July 2007 the Commonwealth Government wants everyone to advise their super fund of their TFN. If Local Super does not have your TFN, your concessional contributions such as salary sacrifice, employer and self- employed contributions may be taxed at 45% plus Medicare levy and Local Super will be unable to accept any non-concessional contributions. What should I do if Local Super doesn’t have my TFN? To provide your TFN you can simply: What does preservation mean? The conditions of release for preserved superannuation are:
Contact Local Super directly for further information. What is my Final Average Salary (FAS)? Where you work on a part-time basis, your final average salary will be calculated using your full-time equivalent superannuation salary. What are concessional contributions and the applicable caps? An annual cap of $50,000 applies to concessional contributions. A transitional period applies to those aged 50 or over between 1 July 2007 and 30 June 2012. During this period the annual cap for concessional contributions taxed at 15% is $100,000. Contributions received above your applicable cap are taxed at a further 30% (plus Medicare Levy). This is in addition to the 15% contributions tax deducted on receipt of the contribution. The taxed excessive contribution is then counted towards your non-concessional contributions cap of $150,000 p.a. Local Super reports all concessional contributions to the ATO. The ATO will notify you if you exceed your applicable contributions caps. The calculation of employer contributions for Salarylink members is calculated based on a formula provided in the legislation as ‘notional taxed contributions’. For further information regarding this calculation please contact Local Super directly. What are non-concessional contributions and the applicable caps? If you are under 65 you can contribute up to $150,000 per financial year or $450,000 where the contributions are averaged over 3 years. If you are 65-74 and you meet the work test* you can contribute up to $150,000 of non-concessional contributions per financial year (averaging does not apply). If you contribute beyond these limits the excess contributions will be taxed at the top marginal rate of 45% (plus Medicare levy). * Between ages 65-74, you must have worked at least 40 hours in not more than 30 consecutive days in the relevant financial year. When will my switch / contribution / withdrawal be processed? Each of Local Super’s 6 investment options are priced daily*. Where an investment switch, withdrawal request or contribution is received, the transaction will generally be processed within 3 business days of the administrator receiving full and complete information to complete the transaction. The unit price* allocated will be the one that applies to the date the transaction is processed. *Unit prices are declared on a daily basis once all investment valuation information is available to determine the unit price. The Board reserves the right to suspend unit pricing should market circumstances prevail that prevent us from obtaining accurate valuations for the underlying assets.
This information has been prepared by Local Super Government Superannuation Board AFSL 232519 RSE Licence No. L0000765 as Trustee of Local Super ABN 92 930 911 098 RSE Registration No. R1001549. The information provided is of a general nature only and does not take into account your personal objectives, financial situation or needs. Therefore, before making any investment decision or acting on any information you should consider the appropriateness of the information having regard to your objectives, financial situation and needs. It is recommended that you seek independent financial advice about your personal objectives, needs and financial situation before making investment decisions. |
