Welcome back to the new school year with new challenges and hopefully new rewards and work satisfaction. There were some interesting developments for super last year and I would like to point out two very good news stories:
Super compulsory employer contributions move up to 12 per cent on 1 July 2025. At last, after various roadblocks by previous governments, super contributions move up to the original plan when the scheme was introduced in 1992. This is great news for people entering the workforce and people in the workforce now.
The Senate passed landmark legislation last November to enshrine the purpose of super in law. This means that future governments will find it more difficult to tamper with our world-class retirement system. The new law states that the objective of super is “to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way”. A dignified retirement for all Australians! Some points to check on your super account.
Contributions
Now is a good time to check your super, especially since the cap on concessional contributions is at $30,000 per year. This includes both employer and salary sacrifice contributions. You may wish to consider your level of contributions and a good way to do this is to speak to your pay office or an NGS Super representative to ascertain whether salary sacrifice is appropriate for you. You will then be able to determine what your pay would be with extra super contributions, which may have tax benefits to bolster your account at retirement.
Investment
Are you a conservative investor? Or are you willing to take more risk in your portfolio? This may depend on your age and appetite for risk. Generally, the younger you are, the more risk you can take because the markets have time to recover in the case of a downturn. If you are closer to retirement, you may wish to preserve what you have acquired by having a more defensive portfolio. Look at the proportion of growth and defensive assets in your account and consider your risk tolerance. Or are you happy with the default option which is carefully selected by the fund trustee and the investment team?
Insurance
Insurance through super is a great benefit which can be shaped to fit your personal circumstances. Standard life cover is age based, and the level of life cover can be increased subject to acceptance by the insurer. Life cover decreases as you grow older. Do you have a large mortgage to cover? If so, you might want to think about your level of cover. Log into NGS Super or check your last Member Statement to see if your level of cover is adequate.
Income Protection is also important in the case of temporary incapacitation. Again, check your level of cover to be sure your income protection is sufficient to pay bills during a period of illness or accident. If your work role has changed, it may be appropriate to adjust your level of income protection insurance. You do not want to be overinsured or underinsured. You can contact your NGS Super representative to assist you with your level of cover.
Your beneficiary or beneficiaries
It is important that your beneficiary or beneficiaries are up to date. Have you had a change in personal circumstances such as a marriage or divorce? Have you made a valid binding death nomination? In the case of a non-binding death nomination, the Fund Trustee has the discretion as to who to pay the benefit to. The trustee will certainly consider your nomination but will investigate your personal circumstances at the time of your death. For example, a non-binding death nomination made 20 years ago may not be valid if you have remarried and have a different situation with a current “dependant”. A “dependant” is defined as a spouse or de facto spouse, a child of the deceased at any age or a person in an interdependency relationship with the deceased. Superannuation law defines who can receive the death benefit.
If you have a valid Binding Death Benefit Nomination, the Trustee has no discretion, and the benefit must be paid to the named dependant. A Binding Death Nomination can also be made to an estate.
Look at your account and consider some of the above information. NGS Super has provided a useful sheet called, “Super Made Simple” which may also assist you
www.ngssuper.com.au. And best wishes for a happy, healthy, rewarding and prosperous New Year.