SUPER - What About a Fair Go ?
The primary aim of compulsory superannuation is supposedly to provide sufficient funds (accumulated over a working lifetime) to circumvent the need, where possible, for pensions to be provided from the public purse.  The secondary aim is to allow individuals to accumulate sufficient fund balances that will provide a better than basic(pension) lifestyle in retirement, that is, sacrifice now, benefit later.

Employers are required to pay superannuation contributions to their employees superannuation funds based on the remuneration deemed to have been paid to the employee. The rate applicable is currently 9.5%.

The statutory contribution has set limits.

Individuals are allowed to salary sacrifice into superannuation without penalty, as long as the statutory and sacrifice amounts do not exceed the set limits in total.

Individuals can make additional contributions of up to $180,000 p.a. From after tax earnings and savings without incurring a contributions tax or penalties.

Currently Super Fund contributions are taxed at 15% on the way into the fund. Earnings in the Fund are taxed at 15%.

Presently there is no discrimination pertaining to statutory contributions. There is no discrimination as to the earnings, wealth or fund balance for each beneficiary.

Unfortunately .... A personal experience !!

My best earning years were when the top marginal rate of tax ( about 60%) kicked in at around $70,000 pa. Apart from the heavy income tax burdon (making it questionable whether the extra effort was worth the net return), your super contributions and earnings had an additional 15% surcharge put on them.

Since 2000 I have had the unforseen and unfortunate experience of being unemployed and ill for most of the time, and unable to bolster my superannuation funds to anything like that necessary to provide for my future.

For this reason I am a strong advocate of not penalising or compromising the funds for individuals until they have a balance that will provide an adequate retirement.


Ponder This ...