Employer Update

Superannuation News

The past twelve months has seen a number of Government-initiated reviews into the superannuation, taxation and retirement support systems.  Each review has made a list of recommendations, which the Government has or will consider. 

The key impact as far as employers are concerned is the proposed gradual increase in the Super Guarantee (SG) compulsory contribution rate from its current 9% to an eventual 12% in 2019.

If implemented, the super guarantee will gradually increase 1 July 2013 as shown below:

Date       New SG amount
Current 9.00 %
1 July 2013 9.25 %
1 July 2014 9.50 %
1 July 2015 10.00 %
1 July 2016 10.50 %
1 July 2017 11.00 %
1 July 2018 11.50 %
1 July 2019 12.00 %

Another proposed change announced relates to the maximum age at which an employee must have SG contributions made on their behalf.  Currently, the super guarantee is not compulsory for those aged 70 and over and still working.  From 1 July 2013, this will increase to 75 years of age. 

Telstra Super’s Client Development and Member Education teams will work closely with relevant employer contacts to help them and their staff adjust each year until 2019.  Future Member Education programs will keep members informed about how to adjust their retirement plans. 

The Cooper Review into superannuation

Last month, the Federal Government released the final report from its primary review into the superannuation system.  Headed by the former Deputy Chairman of the Australian Securities and Investments Commission (ASIC), Jeremy Cooper, the review analysed every aspect of the superannuation system and recommended changes to the superannuation system.

The two major recommendations are a standard default investment option for members (known as ‘MySuper’), and simplifying super fund administration practices (referred to as ‘SuperStream’).

These proposals, if adopted, do have the potential to change many aspects of superannuation for both employers and their staff.  However, given the nature of these proposals and the timeframe generally involved in major legislative changes – coupled with the fact that Australia will shortly vote in a federal election – the end result is yet to be determined. 

We will keep you informed on events as these things unfold, ensuring that future editions of this Employer Update tell you everything you need to know, well in advance.