Super sees strong performance in March quarter

Super sees strong performance in March quarter

Superannuation assets have shown signs of growth despite the impacts of COVID-19 on the Australian economy over the last 12 months, according to the latest Quarterly Superannuation Performance publication.

According to the publication by the Australian Prudential Regulation Authority (APRA), by the end of the March 2021 quarter superannuation assets totalled over $3.1 trillion. This is an increase of 13.9 per cent from $2.744.9 billion in the March 2020 quarter.

The value of total self-managed super fund assets also increased by 13.4 per cent to $787.1 billion in this same time frame.

  March 2020 March 2021 Change
Total superannuation assets $2,744.9 billion $3,126.9 billion +13.9%
Total APRA-regulated assets $1,852.2 billion $2,131.6 billion +15.1%
Of which: total assets in MySuper products $712.5 billion $850.0 billion +19.3%
Total self-managed super fund assets $694.3 billion $787.1 billion +13.4%
Exempt public sector superannuation schemes assets $142.5 billion $157.6 billion +10.6%
Balance of life office statutory fund assets $56.0 billion $50.5 billion -9.8%

Source: APRA Quarterly Superannuation Statistics, March 2021.

In the 12 months leading to 31 March 2021, employer contributions also rose by 3 per cent to $9.78 billion. Super guarantee contributions also increased by 5.4 per cent to $73.2 billion, however member contributions fell by 7.3 per cent to $23.4 billion.

As the country faced the uncertainties of COVID-19, everyday Aussies responded by squirrelling away an extra $124 billion into their bank accounts. It’s unsurprising that in the same time that Aussies prioritised growing their rainy-day funds, many increased the percentage of which they contributed to their super.

Is now the time to make super contributions?

In Australia, the current rate of this contribution – also known as the Superannuation Guarantee - is 9.5 per cent of ordinary time earnings.

The Super Guarantee is tipped to increase to 12 per cent in 2025. While this notion has become a point of political debate as of late, the 2021-2022 Federal Budget noted that this would indeed go forward.

It’s worth keeping in mind the financial impacts of increasing the compulsory or voluntary superannuation taken from your pre- or post-tax earnings. Put simply, the more money you’re adding to your super, whether via an increased rate of guarantee or from salary sacrificing, the greater your nest egg will be at retirement.

Assuming your budget allows for it, here are three ways you may be able to increase your superannuation before retirement:

  • Concessional contributions – Also known as salary sacrificing, you arrange with your employer that they direct a nominated amount or percentage of your pre-tax income to go into your fund on top of the Super Guarantee.
  • Non-concessional contributions – You are also able to make after-tax contributions into your super fund. There is a contribution cap, but it is significantly higher than the concessional contribution cap so you’re able to boost your retirement savings further.
  • Spousal contributions – A spouse or de facto partner may also be able to boost your super fund by making contributions into it for you. This is often recommended to those who have taken time out of the workforce, especially for maternity leave or caretaker work, as it may help to reduce the gender super gap.

If you’re unsure whether to consider making super contributions, ASIC’s calculator estimates what type of contribution may provide the biggest boost towards your retirement.

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Learn more about superannuation

What are reportable superannuation contributions?

For employees, there are two types of reportable superannuation contributions:

  • Reportable employer super contributions your employer makes for you
  • Personal deductible contributions you make for yourself

How can I increase my superannuation?

You can increase your superannuation through a ‘salary sacrifice’. This is where your employer takes part of your pre-tax salary and pays it directly into your superannuation account. Like regular superannuation contributions, salary sacrifices are taxed at 15 per cent when they are paid into the fund.

What are reportable employer superannuation contributions?

Reportable employer superannuation contributions are special contributions that an employer makes on top of the regular compulsory contributions. One example would be contributions made as part of a salary sacrifice arrangement.

How do you pay superannuation?

Superannuation is paid by employers to employees. Employers are required to pay superannuation to all their staff if the staff are:

  • Over 18 and earn more than $450 before tax in a calendar month
  • Under 18, work more than 30 hours per week and earn more than $450 before tax in a calendar month

This applies even if the staff are casual employees, part-time employees, contractors (provided the contract is mainly for their labour) or temporary residents.

Currently, the superannuation rate is currently 9.5 per cent of an employee’s ordinary time earnings. This is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

Employers must pay superannuation at least four times per year. The due dates are 28 January, 28 April, 28 July and 28 October.

Can I transfer money from overseas into my superannuation account?

Yes, you can transfer money from overseas into your superannuation account – under certain conditions. First, you must provide your tax file number to your fund. Second, if you are aged between 65 and 74, you must have worked at least 40 hours within 30 consecutive days in a financial year. (Australians under 65 aren’t subject to a work test; Australians aged 75 and over cannot receive contributions to their superannuation account.)

Money transferred from overseas will generally count to both your concessional contributions limit and your non-concessional contributions limit. You will have to pay income tax on the applicable fund earnings component of any money transferred from overseas. You might also be liable for excess contributions tax.

What is salary sacrificing?

A salary sacrifice is where your employer takes part of your pre-tax salary and pays it directly into your superannuation account. Salary sacrifices come out of your pre-tax income, whereas personal contributions come out of your after-tax income.

How much extra superannuation can I add to my fund?

There is an annual limit of $25,000 for concessional contributions – that is, money paid by your employer and extra money you pay into your account through salary sacrificing. There is also a limit on non-concessional contributions. Australians aged between 65 and 74 have a limit of $100,000 per year. Australians aged under 65 have a limit of $300,000 every three years.

What are personal contributions?

A personal contribution is when you make an extra payment into your superannuation account. The difference between personal contributions and salary sacrifices is that the former comes out of your after-tax income, while the latter comes out of your pre-tax income.

How does superannuation work?

Superannuation is paid by employers to employees, at least once every three months. The ‘superannuation guarantee’ is currently 9.5 per cent – which means that your employer must pay you superannuation equivalent to 9.5 per cent of your salary. The guarantee is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

Superannuation is generally taxed at 15 per cent. However, if you earn less than $37,000, you will be automatically reimbursed up to $500 of the tax you paid. Also, if your income plus concessional superannuation contributions exceed $250,000, you will also be charged Division 293 tax. This is an extra 15 per cent tax on your concessional contributions or the amount above $250,000 – whichever is lesser.

You can withdraw your superannuation when you meet the ‘conditions of release’. The conditions of release say you can claim your super when you reach:

  • Age 65
  • Your ‘preservation age’ and retire
  • Your preservation age and begin a ‘transition to retirement’ while still working

 

What is the superannuation rate?

The superannuation rate, or guarantee rate, is the percentage of your salary that your employer must pay into your superannuation fund. The superannuation guarantee has been set at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

How much is superannuation in Australia?

Superannuation in Australia is currently 9.5 per cent – which means that your employer must pay you superannuation equivalent to 9.5 per cent of your salary.

The ‘superannuation guarantee’, as it is known, has been at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

How much is superannuation?

Superannuation is currently 9.5 per cent – which means that your employer must pay you superannuation equivalent to 9.5 per cent of your salary.

The ‘superannuation guarantee’, as it is known, has been at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

How is superannuation calculated?

Superannuation is calculated at the rate of 9.5 per cent of your gross salary and wages. So if you had a salary of $50,000, your superannuation would be 9.5 per cent of that, or $4,750. This would be paid on top of your salary.

The ‘superannuation guarantee’, as it is known, has been at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.

How do you calculate superannuation?

Superannuation is calculated at the rate of 9.5 per cent of your gross salary and wages. So if you had a salary of $50,000, your superannuation would be 9.5 per cent of that, or $4,750. This would be paid on top of your salary.

The ‘superannuation guarantee’, as it is known, has been at 9.5 per cent since the 2014-15 financial year. It is scheduled to rise to 10.0 per cent in 2021-22, 10.5 per cent in 2022-23, 11.0 per cent in 2023-24, 11.5 per cent in 2024-25 and 12.0 per cent in 2025-26.