It's never too early to start thinking about superannuation. Learn about your super options and how we can help.
UniSuper is the prescribed superannuation fund for Macquarie University employees. Unless you are a current member of State Superannuation Fund (SSF) or State Authorities Superannuation Scheme (SASS), all employer superannuation contributions are paid to UniSuper. You will not be able to choose your own superannuation fund.
Starting with UniSuper
If you start receiving the Superannuation Guarantee of 9.5 per cent, you will have a UniSuper Accumulation 1 account. If you start receiving 17 per cent superannuation, you will automatically go into the Defined Benefit Division.
Defined Benefit Division members have a choice to stay in the Defined Benefit Division or to switch to an Accumulation 2 account. You will have 24 months to decide which account is best for you. If you don’t make a choice within 24 months, you will stay in the Defined Benefit Division and won’t be able to switch later.
To discuss your options make an appointment online with Andrew Syarief, our UniSuper on-campus consultant. If you decide to switch from the Defined Benefit Division to Accumulation 2, complete the Transferring from the Defined Benefit Division to Accumulation 2 form and submit to UniSuper.
The amount of superannuation Macquarie University contributes on your behalf will depend on the type and length of your employment. Superannuation is calculated on Ordinary Time Earnings.
Continuing or fixed-term employment 2 years or longer
17% employer contribution.
In addition to employer contributions, Defined Benefit Division members will make standard member contributions of up to 7% of their after-tax salary.
Fixed-term employment less than 2 years
9.5% employer contribution (Superannuation Guarantee).
9.5% if ordinary times earnings are $450 or more per calendar month, or
9.5% paid 6 monthly if ordinary times earnings are less than $450 per calendar month but more than $2546 (or the amount notified by UniSuper each year) in either of the 6 month periods between 1 January and 30 June or 1 July and 31 December each year.
Standard member contributions
In addition to employer contributions, Defined Benefit Division members will make contributions of up to 7 per cent of their after-tax salary. These are known as standard member contributions.
The members default arrangement is to contribute a standard member contribution of 7 per cent of after tax salary. This is in addition to the employer contribution of 17 per cent. You are able to salary sacrifice your standard member contribution, in which case the standard member contribution will be 8.25 per cent.
Reducing your standard member contribution
You can choose to reduce your standard member contribution through contribution flexibility. If you decide to reduce your standard member contributions, you will still receive an employer contribution of 17 per cent. To reduce your standard member contribution, complete a Contribution flexibility form and email it to email@example.com.
Important: for Defined Benefit Division members, reducing your standard member contribution will impact your final retirement benefit and there may also be implications for your inbuilt benefits. The decision to reduce your standard member contributions is permanent and you will not be able to increase your contributions later. It is best to seek independent financial advice before making a decision.
Additional voluntary contributions
You can voluntarily contribute a fixed percentage, or a fixed amount each pay to your UniSuper account by either after-tax contributions or pre-tax contributions (ie salary sacrifice). You can also salary sacrifice a fixed percentage of your salary or an amount to UniSuper.
To make voluntary pre-tax contributions to another superannuation fund contact NLC, the University’s salary packaging provider, to discuss your options.
Concessional contribution caps
Keep in mind limits apply to concessional superannuation contributions made to your super in a financial year. These limits are known as concessional contribution caps. If you contribute more than these caps, you may have to pay extra tax. Current concessional caps are available on the ATO website. Seek advice from your financial planner on your personal circumstances and concessional contribution caps.
Changes to superannuation from 1 July 2017
From 1 July 2017, there are changes that will impact:
- how much employees in Australia can contribute to their superannuation account without exceeding the concessional contributions caps
- the tax payable on certain contributions, and
- eligibility for some tax benefits.
Concessional contributions cap
The annual caps which apply to the amount of concessional (before tax) contributions you can make to super are changing:
- For the 2016/17 financial year the limit is $30,000 if you’re under 50 years of age and $35,000 if you’re aged 50 and older.
- From 1 July 2017, this limit is reducing to $25,000 for everyone, regardless of age.
This means that in the 2017/18 tax year concessional contributions that exceed the $25,000 cap will incur tax at the employee’s marginal rate plus an interest charge. In other words any contributions above the cap will be taxed at the same rate as applied to the employee’s salary rather than any lower rate previously applicable to superannuation contributions.
Additional tax on contributions (High-income earners)
Concessional (before tax) contributions are generally taxed in the fund at the concessional rate of 15%, however high-income earners may have to pay an additional 15% tax on the concessional contributions that are made within the cap. The income threshold at which the additional 15% tax becomes payable is reducing from $300,000 to $250,000 on 1 July 2017. This additional tax is known as Division 293 tax.
Options for impacted employees
All staff are encouraged to monitor their superannuation concessional (pre-tax) contributions to avoid going over the Government contribution cap.
In monitoring your contributions, please remember to consider any contributions you make to other super funds as well as contributions to your UniSuper account, as the caps apply across all your super accounts.
Employees that exceed the concessional contributions cap or receive a Division 293 tax notice may have the option to pay the tax liability directly from the accumulation balance of their superannuation fund.
Please be aware that members of the UniSuper Defined Benefit and Accumulation 2 Divisions are not permitted to adjust the employer contribution below 17% of salary. Employees may adjust their own personal contribution to stay within the concessional contribution cap but this may have an impact on long term benefit calculations.
For defined benefit members that joined the scheme prior to 12 May 2009, special ‘grandfathering’ arrangements generally apply. For these members, if the Notional Taxed Contribution (NTC) amount is calculated to be above the concessional cap, UniSuper will report to the ATO that your NTCs are equal to the cap (but not above it).
UniSuper has developed a Fact Sheet that includes further details on the ‘grandfathering’ arrangements applicable to pre 12 May 2009 defined benefit members and how your NTC is calculated.
You should get financial advice before making any decisions regarding changes to your superannuation contributions to determine the best option for your personal circumstances.
For further information on the changes to superannuation please review the ATO dedicated website.
Andrew Syarief, Macquarie University’s on-campus consultant, is available to provide free superannuation information that is general in nature. Andrew is located in the Human Resources Reception, Building C5C (entrance via Western stairwell), North Ryde Campus. Make an appointment to meet with Andrew online.
UniSuper also has super advisers who provide personal financial advice on a limited number of topics and private client advisers who can provide comprehensive tailored financial advice. These services are available for a fee. Please call 1300 331 685 to make an appointment.