Employer super payments may be increased to 12%
May 2nd 2010, 3:54 am
#16
Account Closed
Joined: Jul 2006
Posts: 14,188
Re: Employer super payments may be increased to 12%
Hmmm. Why am I not surprised by that. So for folk whose contract specifies $xxx pa PLUS super, they will get an effective increase in their super contributions at no cost to their take home pay, where people who have a packaged salary up to a total will see an effective cut in their take home pay to cover the increase.
So it all comes down to how you negotiated your salary when you started your job.
S
So it all comes down to how you negotiated your salary when you started your job.
S
May 2nd 2010, 4:10 am
#17
Harrip
Joined: Nov 2004
Posts: 495
Re: Employer super payments may be increased to 12%
May 2nd 2010, 4:37 am
#18
Retired
Joined: Apr 2004
Posts: 34,649
Re: Employer super payments may be increased to 12%
Not necessarily ... because the increased contributions are also tax deductible (by the employer).
May 2nd 2010, 6:09 am
#19
Forum Regular
Joined: Jan 2010
Posts: 188
Re: Employer super payments may be increased to 12%
In the Henry tax review to be announced tomorrow, it has been reported that the Compulsory Superannuation payments will increase to 12%.
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
IF this happens, the most interesting point to be resolved will be WHO pays it.
Many people talk about wages and salary packages as including this superannuation payment that is paid by the EMPLOYER.
However, according to the law, this MUST be paid by the employer on top of wages and salary.
The employer cannot reduce your wage by the extra 3% that they may need to pay, if this is enacted.
eg: A person on a salary package of $80,000 including 9% super, will get a basic of $73,394.50 + $6,605.50 in super.
If the rate goes up to 12% this SHOULD become $73,394.50 + $8,807 super, ie: NO change to the employees net pay
When it was brought in by agreement with the unions and Hawke a 3% wage rise was given up to kick it all off back in 86 or 87.The rise went into super,small companies just kept the money ,large companies stopped their own (some very generous) funds and started contributing to what were then mainly industry funds.The end of DBF pensions where the company took the risk, and the start of DCF where the worker took the risk
The scheme was supposed to go up to 15% of wages over time but Howard stopped that.Thankfully I worked out at the time it was a complete waste of time and would produce nothing for retirement and stepped up my financial education.
At the time everybody dreamed of retiring rich because that was what the experts told them and exactly what they wanted to see.Somehow earning around $350 a week at the time I couldn't see how $10.50 a week would lead to wealth ($3.50 x 3).
Today is the same,they dream that 9% will lead to comfort,on average wages it works out around $4500 (after tax) per year.If it had started at 9% back then it was not difficult to work out that $31.50 per week was not going to replace what turned out to be $1180 per week now(approx average wages)
30 yrs down the track 4.5k per year will look just as silly as $31.50 a week did back then if it was 9%.Super never was and never will be a good idea.People will have to bite the bullet and put some work into learning about financial markets and take care of themselves.Following the crowd means you end up in exactly the same place as the crowd.
Geordie downunde
I should add back then some company funds were going on average yields of 14% per year to calculate returns.At the time that was not much more than could be had by puting money into the bank,interest rates were high.
Last edited by swans; May 2nd 2010 at 6:12 am.
May 2nd 2010, 6:18 am
#20
has lost The Game
Joined: Apr 2005
Location: Chippendale, Sydney
Posts: 8,735
Re: Employer super payments may be increased to 12%
A common misconception,the employer pays part of it.
When it was brought in by agreement with the unions and Hawke a 3% wage rise was given up to kick it all off back in 86 or 87.The rise went into super,small companies just kept the money ,large companies stopped their own (some very generous) funds and started contributing to what were then mainly industry funds.The end of DBF pensions where the company took the risk, and the start of DCF where the worker took the risk
The scheme was supposed to go up to 15% of wages over time but Howard stopped that.Thankfully I worked out at the time it was a complete waste of time and would produce nothing for retirement and stepped up my financial education.
At the time everybody dreamed of retiring rich because that was what the experts told them and exactly what they wanted to see.Somehow earning around $350 a week at the time I couldn't see how $10.50 a week would lead to wealth ($3.50 x 3).
Today is the same,they dream that 9% will lead to comfort,on average wages it works out around $4500 (after tax) per year.If it had started at 9% back then it was not difficult to work out that $31.50 per week was not going to replace what turned out to be %1180 per week now(approx average wages)
30 yrs down the track 4.5k per year will look just as silly as $31.50 a week did back then if it was 9%.Super never was and never will be a good idea.People will have to bite the bullet and put some work into learning about financial markets and take care of themselves.Following the crowd means you end up in exactly the same place as the crowd.
Geordie downunder
When it was brought in by agreement with the unions and Hawke a 3% wage rise was given up to kick it all off back in 86 or 87.The rise went into super,small companies just kept the money ,large companies stopped their own (some very generous) funds and started contributing to what were then mainly industry funds.The end of DBF pensions where the company took the risk, and the start of DCF where the worker took the risk
The scheme was supposed to go up to 15% of wages over time but Howard stopped that.Thankfully I worked out at the time it was a complete waste of time and would produce nothing for retirement and stepped up my financial education.
At the time everybody dreamed of retiring rich because that was what the experts told them and exactly what they wanted to see.Somehow earning around $350 a week at the time I couldn't see how $10.50 a week would lead to wealth ($3.50 x 3).
Today is the same,they dream that 9% will lead to comfort,on average wages it works out around $4500 (after tax) per year.If it had started at 9% back then it was not difficult to work out that $31.50 per week was not going to replace what turned out to be %1180 per week now(approx average wages)
30 yrs down the track 4.5k per year will look just as silly as $31.50 a week did back then if it was 9%.Super never was and never will be a good idea.People will have to bite the bullet and put some work into learning about financial markets and take care of themselves.Following the crowd means you end up in exactly the same place as the crowd.
Geordie downunder
Unfortunately, here we have the government deciding that Super is the best retirement investment vehicle on our behalf, and now, it would appear, moving the goalposts to increase payments on our behalf, but as far as I see it these will make me less well off, and hamper my ability to make my own financial decisions.
I agree with Harrip's comments above - this is just more Nanny state government knows best thinking again - taking away people's choice in favour of what the government thinks is best for us.
S
May 2nd 2010, 7:05 am
#21
Banned
Joined: Mar 2010
Posts: 203
Re: Employer super payments may be increased to 12%
A common misconception,the employer pays part of it.
When it was brought in by agreement with the unions and Hawke a 3% wage rise was given up to kick it all off back in 86 or 87.The rise went into super,small companies just kept the money ,large companies stopped their own (some very generous) funds and started contributing to what were then mainly industry funds.The end of DBF pensions where the company took the risk, and the start of DCF where the worker took the risk
The scheme was supposed to go up to 15% of wages over time but Howard stopped that.Thankfully I worked out at the time it was a complete waste of time and would produce nothing for retirement and stepped up my financial education.
At the time everybody dreamed of retiring rich because that was what the experts told them and exactly what they wanted to see.Somehow earning around $350 a week at the time I couldn't see how $10.50 a week would lead to wealth ($3.50 x 3).
Today is the same,they dream that 9% will lead to comfort,on average wages it works out around $4500 (after tax) per year.If it had started at 9% back then it was not difficult to work out that $31.50 per week was not going to replace what turned out to be $1180 per week now(approx average wages)
30 yrs down the track 4.5k per year will look just as silly as $31.50 a week did back then if it was 9%.Super never was and never will be a good idea.People will have to bite the bullet and put some work into learning about financial markets and take care of themselves.Following the crowd means you end up in exactly the same place as the crowd.
Geordie downunde
I should add back then some company funds were going on average yields of 14% per year to calculate returns.At the time that was not much more than could be had by puting money into the bank,interest rates were high.
When it was brought in by agreement with the unions and Hawke a 3% wage rise was given up to kick it all off back in 86 or 87.The rise went into super,small companies just kept the money ,large companies stopped their own (some very generous) funds and started contributing to what were then mainly industry funds.The end of DBF pensions where the company took the risk, and the start of DCF where the worker took the risk
The scheme was supposed to go up to 15% of wages over time but Howard stopped that.Thankfully I worked out at the time it was a complete waste of time and would produce nothing for retirement and stepped up my financial education.
At the time everybody dreamed of retiring rich because that was what the experts told them and exactly what they wanted to see.Somehow earning around $350 a week at the time I couldn't see how $10.50 a week would lead to wealth ($3.50 x 3).
Today is the same,they dream that 9% will lead to comfort,on average wages it works out around $4500 (after tax) per year.If it had started at 9% back then it was not difficult to work out that $31.50 per week was not going to replace what turned out to be $1180 per week now(approx average wages)
30 yrs down the track 4.5k per year will look just as silly as $31.50 a week did back then if it was 9%.Super never was and never will be a good idea.People will have to bite the bullet and put some work into learning about financial markets and take care of themselves.Following the crowd means you end up in exactly the same place as the crowd.
Geordie downunde
I should add back then some company funds were going on average yields of 14% per year to calculate returns.At the time that was not much more than could be had by puting money into the bank,interest rates were high.
http://www.futuretax.gov.au/pages/default.aspx
The 9% superannuation contribution is the MINIMUM which MUST be contributed.
For some time those under 50 can OPTIONALLY contribute up to a total of $25,000 per year at the concessional tax rate of 15%; those over 50 can currently and will continue after 2012/June/30 to be able to OPTIONALLY contribute up to $50,000 per year (after 2012/June/30 only if their super fund is worth less than $500,000).
These caps were halved by the Labor Government.
http://www.deewr.gov.au/Department/D...below_500K.pdf
A 35 year old starting with a zero balance contributing $25,000 per year into a superannuation fund yielding 8% per year and taxed at 15% on contributions and yield would have a balance of $1,416,132 at age 60.
With inflation of 3% per year the balance would be worth 46.7% or $661,297 in today's money and yield $104,485 per year or $48,792 in today's money.
(If the $50,000 concession persists the 60 year old's balance could be $1,747,999)
Last edited by AllGoode; May 2nd 2010 at 7:07 am.
May 2nd 2010, 7:06 am
#22
Has left the building
Joined: Mar 2007
Posts: 4,079
Re: Employer super payments may be increased to 12%
Having my employees on 15% already it seems obvious to me to just raise it now to 18% and absorb the 3%.
We will also be advising our employees swiftly that this increase in no way will have an impact on their annual performance related increases or CPI increases (both awarded at different times).
We will also be advising our employees swiftly that this increase in no way will have an impact on their annual performance related increases or CPI increases (both awarded at different times).
May 2nd 2010, 7:10 am
#23
Guest
Posts: n/a
Re: Employer super payments may be increased to 12%
The employer could not cut the persons pay, but there was nothing to stop them from reducing future pay-rises if they so desired.
The Law clearly states:
As an employer you have an obligation to pay super contributions on behalf of all your eligible employees.
These contributions are in addition to your employees’ salaries and wages.
http://www.ato.gov.au/businesses/con...tent/24302.htm
These contributions are in addition to your employees’ salaries and wages.
http://www.ato.gov.au/businesses/con...tent/24302.htm
May 2nd 2010, 7:18 am
#24
Guest
Posts: n/a
Re: Employer super payments may be increased to 12%
Overall it seems to be a good thing, although I did not think that way in 1992 !
In the Budget, Treasurer John Kerin announced that from 1 July 1992 , under a new system to be known as the Superannuation Guarantee (SG), employers would be required to make superannuation contributions on behalf of their employees.
Super contributions were progressively increased between 1992-2002, from 3% up to 9%.
Super contributions were progressively increased between 1992-2002, from 3% up to 9%.
May 2nd 2010, 7:30 am
#25
BE Forum Addict
Joined: Feb 2008
Location: Hope Island, Gold Coast
Posts: 1,920
Re: Employer super payments may be increased to 12%
I'm moving over next week and am trying to keep up with current affairs.
Thanks!
May 2nd 2010, 7:51 am
#26
Guest
Posts: n/a
Re: Employer super payments may be increased to 12%
Chris Bowen, the Minister for Financial Services, said that the change to the rate of Compulsory Super would be gradually increased over the next few years as follows:
2013-14 9.25%
2014-15 9.50%
2015-16 10.00%
2016-17 10.50%
2017-18 11.00%
2018-19 11.50%
2019-20 12.00%
May 2nd 2010, 10:52 am
#28
Guest
Posts: n/a
Re: Employer super payments may be increased to 12%
With the rate increasing to 12%, expected pension benefits should be about 33% higher than they would have been at 9%. Therefore lasting longer.
When compared to days before the scheme began, it is a great benefit.
May 2nd 2010, 2:01 pm
#29
BE Enthusiast
Joined: Aug 2002
Location: Northumberland to Maida Vale Perth
Posts: 972
Re: Employer super payments may be increased to 12%
This 12% figure was mentioned a few months back in the papers. For it's introduction the government will come to an agreement with the unions to lower wage rises to help employers with implementation.
The government then wants the extra super to be invested to help fund the booming mining sector that is suposed to keep the country wealthy, rather than relying on foreign investment.
Keel
The government then wants the extra super to be invested to help fund the booming mining sector that is suposed to keep the country wealthy, rather than relying on foreign investment.
Keel
May 2nd 2010, 10:21 pm
#30
Account Closed
Joined: May 2009
Posts: 2,708
Re: Employer super payments may be increased to 12%