IMPORTANT INFORMATION FOR ADVISERS
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This document has been prepared by Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468
(Colonial First State) based on its understanding of current regulatory requirements and laws as at 7 September 2015. While
all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), to the
maximum extent permitted by law, no person including Colonial First State or any member of the Commonwealth Bank group
of companies, accepts responsibility for any loss suffered by any person arising from reliance on this information.
This document does not take into account any person’s individual objectives, financial situation or needs. You
should read the relevant Product Disclosure Statement (PDS) before making any recommendations to a client.
Clients should read the PDS before making an investment decision and consider talking to a financial adviser.
Smart strategies to increase your superannuation
Ensuring you have a healthy super balance is one of the most effective ways of
building financial security for your future
You don’t need to rely on just your employer’s compulsory Super Guarantee (SG)
contributions to increase your hard-earned super – there are steps you can take to make
your super savings work harder for you.
Why having more super matters
According to the Australian Government Treasury’s 2015 Intergenerational report,
Australians are living longer and in better health than ever before. This means you’ll
probably need more money than past generations to fund the long and active retirement
ahead of you.
Even though SG contributions from your employer will gradually increase from 9.5% to
12% over the coming years, Deloitte Actuaries & Consultants’ 2014 report Adequacy and
the Australian superannuation system found that relying on SG contributions may not be
enough to fund the type of lifestyle you’re aiming for when you stop working.
Here are some smart strategies to help you build that retirement nest egg and some of
them don’t even require you to dip into your own money.
1. Track down your lost super
If you’ve had multiple jobs, then it’s only too possible that you’re one of the millions of
Australians with lost super, especially if you’ve done temporary or casual work.
According to the Australian Taxation Office (ATO)’s 2015 Super accounts data overview,
in June 2015 there were over six million super accounts worth over $16 billion waiting to
be claimed and some of that super could be yours.
You can easily search for your lost super and consolidate it into one fund. If you want to
do it yourself, you can use the ATO’s SuperSeeker tool.
If you’re pressed for time and you’re a Colonial First State member, why not use our free
Super Concierge service? We’ll look for any lost super accounts you may have, them
help you consolidate them all into one fund — helping you make the most of your super
savings.
2. Bring all your super together – it could reduce fees
ATO’s SuperSeeker also lets you transfer your super into your preferred account, which
can reduce your fees and make your super easier to manage.
When you’re choosing a fund for your super, look at all the costs and benefits to make
sure you pick one that best suits your needs. If you decide to switch, consider exit fees,
investment implications and whether your existing insurance arrangement will be
affected. Speak to a financial adviser to help make sure you maintain adequate levels of
insurance.
You should also consider any tax implications of switching super funds.
3. Salary sacrifice
Salary sacrificing involves making additional contributions to your super from your pretax income, and are a type of concessional contribution. While this option reduces your
take home pay, the tax concessions and effect on your super balance could make it
worthwhile. You should check with your employer first to see whether salary sacrificing
arrangements are available and that the amount of SG contributions your employer pays
on your behalf are not reduced if you choose to salary sacrifice.
Some of the benefits of salary sacrificing are:


Salary sacrifice contributions don’t attract income tax and are instead generally
taxed at just 15% which may represent a significant tax saving, depending on
your marginal income tax rate.
Together with your employer’s SG contributions (and any personal tax-deductible
contributions if you’re eligible), you can contribute up to $30,000 per year. If
you’re aged 50 or over1 any time in the financial year, you can contribute up to
$35,000 instead.
Keep in mind:

If you go over the annual cap, excess contributions are effectively taxed at your
marginal tax rate, so it’s important to keep track.
People like you
Ben, 48, is starting to think more about life after work and if he can afford to do all
the things he
has in mind in retirement. He earns $80,000 a year before tax and has a super
balance of $100,000. He decides to sacrifice $40 a week to his super.
By the time he retires at age 67, he’ll have an estimated super balance of $311,546.
If Ben didn’t sacrifice $40 a week, he’d end up with a super balance of 275,694.2
1
A higher cap of $35,000 applies if you were aged 49 or over at 30 June 2015.
ASIC’s MoneySmart Superannuation Calculator, moneysmart.gov.au. Calculation made on 31/8/15. Figures
may change if the calculation is run at a later date. Calculated assuming employer contributions of 9.5%,
contribution fees of 1%, management fees of 0.50%, investment return of 5.7%, earning tax of 7% and rise in
cost of living of 2.5%.
2
4. Make after-tax (non-concessional) contributions
These are generally made to your super after you’ve already paid tax on them and could
be from sources such as your take home pay, profits you receive from your business or
selling an asset, contributions made by a spouse or an inheritance.
People like you
Mary saves $5000 from her salary and holds it in her savings account. Over five years,
her savings grow to $6,163 and she pays $743 tax in that time.
However, if she contributes the same amount to her super, her super savings increase to
$6,675 because she pays $447 less tax and ends up with $512 for retirement. 3
Keep in mind contributions caps:

To make voluntary contributions to super, you generally need to be 65 years of
age or under, or aged 65 to 74 and working part time.

You could deposit up to $180,000 a year without paying any additional tax.
Where you have exceeded your non concessional cap you may elect to withdraw
your non concessional contributions.4 Excess non-concessional contributions not
withdrawn are taxed at 49%.

If you’re under 65 years of age (any time during a financial year), you may be
able to benefit from what’s called the ‘bring forward’ rule, where you roll three
years’ worth of non-concessional contributions into one. This means you could
contribute up to $540,000 into your super in one year.
Concessional
(pre-tax)
$30,000 pa
Under 50
Contribution caps
Non-concessional
(after-tax)
$180,000 pa
OR
$540,000
65 to 74
If under 65
(over three financial years)
$35,000 pa
50 or over
3
Source: Colonial First State. Assumptions are based on 7% compounding annual returns for five years and
39% (including Medicare levy) tax rate on investment income.
4
Excess non concessional contributions plus 85% of an associated earnings amount may be withdrawn. Please
note that 100% of the associated earnings amount will be assessable to you at your marginal tax rate with a 15% tax
offset.
5. Take advantage of the government’s co-contribution scheme
If you earn less than $50,454 during the 2015-16 financial year and you make personal
(after-tax) super contributions, you may be eligible for a government co-contribution of
up to $500.
6. Access the benefits of a Spouse Contributions Tax Offset if your
spouse is a low income earner
If your spouse is eligible and your super fund allows it, you could get a Spouse
Contributions Tax Offset when you make a super contribution on behalf of your spouse.
Your contribution up to a limit of $3,000 could attract an 18% offset. The maximum
offset amount is $540.