Ten things to understand about Australian superannuation fund which is solely used for retirement purpose only (like our CPF contribution system):- 1. Your employer has to pay super guarantee contributions for you if youre 18 years old or over and earned at least $450 (before tax) in a month or work more than 30 hours in a week.There is no compulsory contribution for workers to the superannuation fund. One major advantage of superannuation is the compound interest accrued over decades of a persons working life 2. If you’re a sole trader or a partner in a partnership, you don’t have to make super contributions to a super fund for yourself. However, you might want to make super contributions anyway to save for your retirement. 3. If you’re eligible for super guarantee contributions, at least every three months your employer must pay into your super account a minimum of 9.25% of your ordinary time earnings, up to the maximum contribution base. For example, if your ordinary time earnings for the quarter are $20,000 your employer must pay $1,850 into your super account. 4. Most people can choose the super fund they want their employer contributions paid into, as long as it’s a complying fund. A complying fund is an Australian super fund that receives concessional tax treatment because it’s regulated under the relevant super legislation and hasn’t been issued with a notice of non-compliance. 5. You can boost your super by adding your own contributions to any contributions an employer may be making for you. Personal contributions are non-concessional or ‘after-tax’ contributions unless you have claimed a tax deduction for them. 6. You can access your super when you reach your preservation age or retirement age at 65. Your preservation age is the age at which you can access your super if you are retired (or have started a transition to retirement income stream). Your preservation age depends on when you were born and average 55 years old. 7.You receive a super income stream as a series of regular payments from your super fund (paid at least annually). The payments dont need to be at the same interval and the amount paid may also vary. 8.You can receive your super as a super income stream, as a super lump sum or as a combination of both. 9. In most cases, when a person dies their super fund will pay their remaining super to the person that they have chosen as their nominated beneficiary. Super paid after a persons death is called a super death benefit. 10. Generally your super benefit will include both a tax-free and a taxable component. When you make a withdrawal your fund will calculate the components based on the same proportion that makes up the total value of your super account. The calculation for a super lump sum is done just before it is paid.
Posted on: Thu, 22 May 2014 11:03:07 +0000
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