about super

Please click on the item(s) that interests you:

• Anti money laundering
• Beneficiaries
• Buy/Sell spread
• Choice of Fund
• Concessional contributions (salary sacrifice)
• Contribution limits
• Contributions tax
• Employer contributions
• Government Co-contribution
• How much super is enough?
• Leaving Australia permanently
• Maximum super contribution base
• Member contributions
• Non concessional contributions
• Ordinary Time Earnings
• Preservation - restrictions on accessing or cashing super

anti money laundering

Unfortunately the prevalence of identity fraud against superannuation funds is ever increasing. It is therefore important that we remain vigilant take all reasonable steps to protect our members’ benefits.

Superannuation funds must comply with new rules which have been set up to reduce the risk of superannuation funds being used to launder money or finance terrorism.  A requirement of the legislation is that you will be asked to provide certified proof of your identity before any benefits are paid to you. You will be asked if this is the case.

Upon joining REI Super we do not ask members to provide proof of identification. However if a member wishes to withdraw their benefit, either partially or in total, there are Anti Money Laundering and Counter Terrorism Financing requirements (AML/CTF). These requirements are driven by Federal government legislation and all funds need to comply with them.

Essentially these measures require members to provide additional identification and to ensure that super funds, like REI Super, send benefits to the correct addresses. Instances where this is necessary include:

• rollovers to another complying fund:  Where a member is rolling over a benefit to another fund, they need to provide a copy of their driver’s licence or passport. If neither of these is available there are alternative forms of identification that can be provided.  Members may also receive a phone call to verify their identity before payment.
• cash payments: When a member is withdrawing all or part of their benefit as a cash payment they need to provide “certified” proof of identity. The persons authorised to certify documents must ensure they write or stamp ‘certified true copy’ on each page, along with his/her signature, printed name, date and qualification. For partial withdrawals proof of identity is required for each withdrawal. The list of those able to certify documents is listed on the benefit payment form.
• change of name or address: Members should ensure they update their address details promptly when they move by either calling the Helpline on 1300 13 44 33 or online through the secure member login area. If addresses are updated prior to benefit payment requests possible delays may be avoided. When changing a name, supporting documentation is required such as a certified copy of a marriage certificate or change of name certificate.  Members should complete a Change of Membership Details form.

Failure to provide adequate identification may delay benefit payments. Identity requirements are further detailed on the Payment Instruction form which is available by calling 1300 13 44 33 or send a request via email.

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beneficiaries

Most members of superannuation funds are unaware as to who has control of the payment of a benefit if a member dies.  With most funds, the Trustee has absolute discretion as to whom the benefit is paid.

The Trust Deed of a fund will usually designate those who may be eligible to receive a death benefit payment.  In the case of REI Super, the Trustee is required to pay the benefit to a dependant or dependants or to the legal personal representative of the deceased.

A dependant can be a spouse and any child of a member at the time of the member’s death or other relevant time, any other person who, in the opinion of the Trustee, was wholly or partially dependent upon the member in any way at the time of death or other relevant time and the term ‘Dependant’ will also extend at the absolute discretion of the Trustee to any person deemed acceptable as a dependant under superannuation or tax legislation. Thus the Trustee has a great deal of discretion as to whom any death benefit is paid.

Members of REI Super are encouraged to nominate a beneficiary or beneficiaries when they join the Fund or at any time after joining if they want to change their nomination.  However, if the nominated beneficiary or beneficiaries are not dependants, the Trustee will need to look further before deciding who should receive the benefit.

The most usual form of guidance for a Trustee in this circumstance is the member’s will.  However, if the member has not left a will and there are no dependants or a legal personal representative, the Trustee may pay the death benefit to a non-dependant.

A further important consideration for members is the tax implications of the payment of a death benefit.  While death is inevitable, the quantum of tax can be minimised.  The most effective means of minimising tax is for the nominated beneficiary or beneficiaries to be dependants.

In almost every instance, the Trustee will look to pay the benefit to a dependant.  Within limits, no tax is payable.  Payment of a benefit to a member’s estate incurs tax.

As superannuation is likely to be one of your most significant assets when you die, it is important that you ensure that it ends up in the right hands and that any tax liability is minimised. 

You can change your beneficiary online by logging into your account online or by completing this change of details form.

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buy/sell spread

When a contribution is received or a benefit is paid, it is used to purchase or sell units in your investment option. For some investment options, the entry price for the issue of units may be different from the exit price for the redemption of those units.  The difference between the exit and entry price represents an allowance for transaction and operational costs and is commonly referred to as a 'buy/sell spread'.

Buy/sell spreads (if incurred) are additional costs and do not form part of the managements costs.  They are included in the unit pricing process.

The Fund will, wherever possible, use available cash flow (i.e. contributions coming in) to pay benefits to members leaving the Fund.  This will avoid costs associated with buying and selling underlying assets.  Any saving produced is distributed to Members of the Fund as part of the calculation of unit prices. This results in a reduction of management costs charged to Members.

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concessional contributions

Concessional contributions will generally include:

• superannuation guarantee contributions
• voluntary Employer contributions
• salary sacrifice contributions

Concessional contributions are capped at $25,000 p.a. 

People 50 years of age and over
A transitional cap exists for those who are 50 or over until 30 June 2012. These individuals are allowed to contribute $50,000 p.a.

If you are considering making personal contributions to super via salary sacrifice, we urge you to document your arrangement.  Specifically be sure to address:

• how much you will contribute
• how frequently
• to which super fund
• how soon after the amount is deducted from your income it will be paid to your super fund

You may want to consider implementing an agreement such as this sample Salary Sacrifice Agreement.

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contribution limits

• Earn less than $450 per calendar month
• Are age 70 or over
• Are under age 18 and working less than 30 hours per week

Where the cut-off date falls on a weekend or public holiday, payment may be made on the next working day after the cut-off date.

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access to your super if you leave Australia permanently

If you’re leaving your employer’s service and:

• you entered Australia on a temporary visa, and
• you will be leaving Australia, and
• your temporary visa will soon expire or will be cancelled, and
• you are not an Australian or New Zealand citizen or permanent resident

then you may be eligible to access your super and have it paid directly to you after you have left Australia.  Call the Helpline on 1300 13 44 33 for more information on how to make an application to the trustee for the release of your super for this reason.

You should note that if at least six months has passed since your temporary visa has expired, or been cancelled and you have left Australia and have not claimed your super from your plan the trustee can be required to transfer your super to the ATO.  You will then need to contact the ATO to claim your super which will be paid subject to the deduction of tax*.  The ATO will provide the trustee with details of the members whose super must be transferred in these circumstances.  Interest (or investment earnings) is not paid on amounts paid by the ATO (except in certain circumstances if the person becomes an Australian citizen or permanent visa holder).  The transfer to the ATO can be required even if you are still employed by your Australian employer.  If your benefit is transferred to the ATO in these circumstances and you need assistance to prove to the ATO that you are entitled to that benefit, please contact the Helpline.

* The tax rates that apply to super payouts paid to a temporary resident who has left Australia are higher than those which apply to permanent residents or Australian or New Zealand citizens.

In most cases, the trustee is required to provide a member with an exit statement when their benefit has been paid out of the plan.  However, the Australian Securities and Investments Commission has provided trustees with relief from this requirement where benefits are paid to the ATO in these circumstances.  This relief has been granted because most temporary residents do not advise the trustee of their address details after they have left Australia.  The trustee intends to rely on this relief.  This means that the trustee is not obliged to notify or give an exit statement to a non-resident where a benefit has been transferred to the ATO in these circumstances.

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maximum superannuation contribution base

There is a maximum limit on the amount of super support you are required to provide for your employees.  This amount is indexed each year.

In 2010/11 employers are required to pay superannuation guarantee contributions on earnings up to $42,220 per quarter (i.e. $168,880 pa assessed quarterly).

This means that if employees earn more than this figure in a financial quarter you are not obligated to pay super on their excess earnings.  It also means that if an employee earns $60,000 one quarter and nothing the next quarter, that you pay 9% of the $42,220 the first quarter and nothing the next.

Note: Employers may be obligated to contribute above these limits under any industrial awards or workplace agreements in place.  For example if your employment contract states that commissions splits are paid inclusive of super then you may be required to continue to pay super above this threshold.

If you have questions about this applies to you please contact us.

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All real estate employers are required to pay SG contributions super based on ‘Ordinary Time Earnings’.

Ordinary Time Earnings are an employee’s earnings in relation to ordinary hours of work (including over-award payments, bonuses, commission, shift allowances and paid leave).