M Superannuation Powerpoint - W11 Superannuation Social...

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W11: Superannuation & Social Security PRESENTED BY: Michelle Cai Evan Wong Cherry Ye
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What is Super? Superannuation is a system of saving in order to have funds in retirement May be compulsory Or voluntary Preservation rules Ensure that superannuation benefits cannot be released before a certain time Certain special circumstances may satisfy a condition of release that entitles the beneficiary to access benefits prior to the date Actively controls the age of people leaving the workforce
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Stages of Superannuation Contributio ns Accumulati on Benefits Compulsory e.g. Industrial award, superannuation guarantee Voluntary e.g. personal contributions , contributions made by someone else. Funds Industry fund Employer funds SMSF Retirement savings account Withdrawal Super income stream Lump sum withdrawal
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Superannuation Guarantee Scheme Prior to 1992, there were super arrangements under the Industrial Awards system However, only the employees covered by the awards received superannuation contributions, and only at (minimal) 3% of earnings Introduced in 1992, today’s Superannuation Guarantee system is imposed on all employers The contribution is at least 9% of the employees ordinary time earnings in each quarter Amount of superannuation to be paid by employer = Contribution Rate × Ordinary Time Earnings No superannuation guarantee has to be paid on an employee’s earnings over and above $42, 220 per quarter The amount is paid into an RSA or complying fund
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Superannuation Guarantee Scheme If the employer does not contribute (at least) the required amount per quarter, i.e. 9% of OTE, then the employer must pay a superannuation guarantee charge : The super guarantee shortfall; AND A penalty equal to 10% pa; AND Administration component ($20)
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Superannuation Guarantee Scheme Most superannuation is taxed concessionally at 15%, either at the contributions or earnings stages Contributions Incl contributions such as employer superannuation payments, or salary sacrifice [can contribute up the cap of $25,000, including the auto 9.25%]
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