Contributing to Super
Employer contributions
In most cases Superannuation Guarantee law requires your employer to contribute 9% of your ordinary time earnings to superannuation. This is compulsory. If you join ACSuper these contributions are credited to your account.
Contributions made by you
You can choose to contribute to your account yourself, on top of any contributions made by your employer. This is voluntary, not compulsory. Making member contributions yourself is an effective way of boosting your super.
Member contributions can be made from your after-tax pay or from your pay before tax is deducted by your employer (this is called salary sacrifice), Salary sacrifice contributions can reduce the amount of personal income tax you pay.
There are limits on how much you can contribute to super.
Before-tax contributions:
if you are under 50 the limit on total before-tax contributions (made by your employer and by salary sacrifice) is $25,000 each year and if you are 50 or over the limit is $50,000 each year until 1 July 2012*.
After-tax contributions:
if you are under 65 the limit on after-tax contributions is $150,000 each year or $450,000 over three years.
* The Government has announced that from 1 July 2012 the higher concessional contributions cap will apply for those aged 50 or over with total superannuation balances or less than $500,000.
Government co-contribution
The government will match each $1 an eligible person contributes from after-tax pay with a co-contribution of up to $1, up to a maximum amount of $1,000 p.a. To be eligible for the full co-contribution you need to earn $31,920* p.a. or less. But you can still get some of the co-contribution from the government if you earn up to $61,920* p.a. For full details of the current eligibility conditions call the Australian Taxation Office on 13 10 20 or visit www.ato.gov.au/super
* Applies for the 2011/12 tax year. The Government announced in the 2011/12 Federal Budget that these income thresholds are to apply until 30 June 2012.
Rollovers
If you have super in other funds, you can rollover and consolidate them together in your ACSuper account. That way you’ll have all your super together and may pay less in fees. We can help you with this. Before closing your other super account, you should consider whether any exit fees or taxes apply and whether you may lose other valuable benefits such as extra employer contributions or insurance.
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Note:
You should read the other important information about contributing to super and the rules on withdrawing money from super before making a decision. Go to the “How super works” section of the Australian Securities and Investment Commission (ASIC) website www.moneysmart.gov.au
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Where you put your super is almost always your choice
Most people have the right to choose the fund their employer pays their superannuation guarantee contributions (SGC) into. To find out if you are eligible for Choice of Fund, speak to your employer or contact us. For more information visit www.ato.gov.au/super
Super is there for your retirement and attracts generous tax savings
Because the government wants to encourage everyone to save for retirement, it provides tax savings for money invested in super. Since the purpose of super is to help you build up retirement savings, you generally cannot withdraw your money from super until you retire permanently from the workforce after you have reached your preservation age. Your preservation age depends on when you were born. If you were born before 1 July 1960, your preservation age is 55. Once you are 60 and retired, your money can be taken out of super tax-free as a pension or lump sum. See section on taxation for more information.