Superannuation is a tax effective vehicle for accumulating wealth for your retirement. Superannuation investments are eligible for special tax concessions that are not available to other types of investments.
Benefits you should be aware of when considering investing in the superannuation environment are:
- You receive significant tax concessions on your investment earnings. Income and capital gains derived from your superannuation investments are taxed at a maximum rate of 15% (capital gains are taxed at 10% where investments have been held for longer than one year);
- You can add to your investment on a regular basis;
- You may be eligible to receive a tax deduction for your superannuation contributions;
- Your access to your superannuation capital is restricted. Your superannuation capital can only be accessed once you meet a condition of release (this generally occurs at retirement after preservation age or at age 65). However, there is also an opportunity to access your superannuation benefits prior to retirement via a ‘Transition to Retirement’ strategy;
- Your superannuation benefits can be used to commence a tax effective income stream in retirement.
Superannuation Guarantee Contributions (SGC)
The Superannuation Guarantee (SG) is a Commonwealth Government program that has applied from 1 July 1992. The program requires all employers to make minimum contributions to a complying superannuation fund for their employees. An employer includes the public and private sector, tax exempt organisations and family companies or trusts if they pay salary or wages.
For the 2014/15 Financial Year the rate of SGC is 9.5% of Ordinary Time Earnings (required to be paid at least quarterly). This will rise to 12% by 1 July 2019.
How McLardy McShane Financial Services can assist you with your Superannuation?
Whether we are reviewing a current client’s superannuation or making a recommendation to a new client with regard to their superannuation there are a number of criteria that we strongly consider, they include, but are not limited to:
- The account balance of the client’s superannuation fund.
- Our preferred suit of product providers.
- The quality of the administrative service offered to our clients.
- The quality of the adviser administration and technical support.
- The underlying investment options (both quality and quantity).
- The management / administrative fees charged by the product provider.
- The MER (Management Expense Ratios) charged by the underlying managers to the administrator company / product provider.
- Quality of insurance offer underlying the superannuation facility.
- Premiums for underlying insurance.
Our Preferred Suit of Product Providers
We have reviewed many of the market providers of personal super and due to business efficiencies we selected only three product providers in this field (we note that we review these periodically) – the three we selected, we believe, are leaders in this market. We have well established relationships with these companies and receive a high level of service and support from these companies for our clients and also for our business at large.