New year, new super changes
New year, new super changes
As a host of changes to super kicked off at the start of the new financial year, industry and government squared off around who the new reforms might benefit.
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As of 1 July the super guarantee rises to 10 per cent of workers’ base salary, with industry fund advocacy group Industry Super Australia touting its benefits for younger employees in particular.
“In total Australians will get an extra $1.5 billion paid in super in the next 12 months,” the group said.
“Half of the extra super payments – about $784 million will go to those under 40 – and more people in their 20s will get a super boost than any other age bracket. The extra contributions will help young workers recoup the savings they lost after they were encouraged to raid their super to support themselves through the coronavirus downturn.”
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Treasury’s Intergenerational Report showed that superannuation funds under management will soar from around 157% of GDP currently to a projected 244% of GDP by 30 June 2061:
As at 31 March 2021 the superannuation system had assets under management valued around 157 per cent of GDP.80 It is projected this will grow to around 244 per cent of GDP by 30 June 2061. Of this amount, it is estimated that almost three-quarters of funds under management will be held in the accumulation phase.
The IGR also showed that the cost of superannuation concessions will over take the cost of providing the aged pension:
The government’s plans to push superannuation funds and schemes to offer retirement income solutions could spawn intra-fund strategies that test the existing boundaries of advice and guidance, an industry discussion has revealed.
A group of superannuation funds within the country’s largest by assets raised the possibility that proper retirement solutions fit uncomfortably with the existing advice and guidance frameworks at
Professional Planner’s parent Conexus Financial’s recent Retirement Conference.
Funds currently take a conservative approach to the provision of intra fund advice because what constitutes financial advice is not clearly defined, but the work being done by policy makers and the funds themselves to clear the way for the government’s Retirement Income Covenant will likely open new pathways for advice within super, the conference delegates heard.
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