Frequently Asked Questions - Superannuation
- Do I have a choice of fund?
- Employer Subsidy
- What are the effects of salary sacrificing super?
- How do I salary sacrifice?
- How do I know what fund I am in?
- Can UniSuper members choose between defined benefit and accumulation?
- What is the difference between defined benefit and accumulation?
- Why is there no super on my payslip?
- Can I vary my contribution rate?
- Why 8.25% rather than 7%?
- What is the Co-Contribution Scheme?
Do I have a choice of fund?
No.
Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004
The Superannuation Legislation Amendment (Choice of Superannuation Funds) Act 2004 takes effect on 1 July 2005. The legislation allows employees, with certain exemptions, to direct contributions made by employers in accordance with the Superannuation Guarantee Charge (SGC) Act to the superannuation fund of their choice.
The legislation exempts employees for whom contributions are being made "under or in accordance with" a Certified Agreement under the Workplace Relations Act 1996. Under the terms of the Charles Sturt University Enterprise Agreement, employer superannuation contributions are made to UniSuper and as such CSU employees covered by this Agreement are exempt from the Choice of Funds legislation.
Employer Subsidy
Defined benefit members should note, the subsidy is the amount CSU is billed by the fund, however, the employer component of your superannuation benefit is calculated using a formula determined by the fund and does not necessarily reflect the amount paid by CSU.
State Super members (SSS and SASS) should note that superannuable salary is determined at the annual review date of the member. SSS members are reviewed annually at a either 28 July for members whose Birthday is between 1 st January and 30 th June, or 9 February for members whose Birthday is between 1 st July to 31 st December. SASS members are reviewed annually at 31 December. Links to funds fact sheets.
Super Guarantee members - Superannuation guarantee is calculated after the last pay in each month. It will only appear on your payslip for the final pay period in the month.
Should I salary sacrifice my super?
Making before tax contributions to your super reduces your gross taxable income and, therefore, the income tax you are required to pay. These contributions are subject to a 15% contributions tax.
Salary sacrifice may not be suitable for everyone.
Points to Consider
- You receive a greater take home pay - the tax benefit is equal to the difference between your marginal taxation rate and the 15% contribution tax payable on pre-tax contributions.
- You can contribute your tax savings to your superannuation account to increase your future retirement benefits. Tax savings can also be used for other forms of investments or savings.
- You benefit from a reduction in PAYG income tax on salary and salary related benefits.
- As a before-tax contribution it is counted as a 'concessional' contribution and is subject to the government specified caps. If you exceed the concessional contribution cap during a financial year you will be taxed an additional 31.5% tax on the excess portion.
- The Government co-contribution is only payable on after-tax personal contributions (if your assessable income, including fringe benefits, is up to $58,980)
CSU recommends that you seek qualified, independent financial advice. Information is also available at your super fund’s web site.
- UniSuper Web Site
- SASS Web Site
- SSS Web Site
- CSU Salary Sacrifice Calculator
- UniSuper Members Resources
How do I salary sacrifice?
To salary sacrifice your super, complete the applicable Superannution Salary Packaging form, located on the forms section of this site. Send the completed form to the Payroll Office, Wagga campus.
Changes to your salary packaging arrangement can be made at any time by completing a new form.
How do I know what fund I am in?
If you are unsure what fund you are in, you can refer to your payslip which can be viewed on the Web Kiosk. See the section "Understanding My Payslip" on the following page for more details:
If you are unsure if you are a Defined Benefit or an Accumulation Member with UniSuper, you can access the member online facility on the UniSuper Web Site.
Can UniSuper members choose between defined benefit and accumulation?
You have 12 months from the date you join UniSuper to decide whether to stay in the Defined Benefit Division or to transfer your benefit to Accumulation Super (2). If you don’t make a choice you will remain a Define Benefits member.
Once you have made your decision, you cannot change your mind. Unless you leave the fund altogether and rejoin at a later date, you will not be offered this choice again.
What is the difference between defined benefit and accumulation?
The key difference between defined benefit and accumulation-style super is the way benefits are calculated:
- Defined benefits are calculated (or defined) using a formula that includes your age, salary and years of membership. Defined benefits are typically not determined by investment performance.
- Accumulation super is kept in an account. All member and employer contributions are paid into this account and invested in one or more of your chosen investment options. Your super balance accumulates over time with investment returns (which may be positive or negative). Your final benefit is the total of your account (minus fees and taxes) and depends on investment performance.
Why is there is no super on my payslip?
In accordance with the Superannuation Guarantee legislation, introduced 1 July 2003, 9% superannuation is calculated monthly for Super Guarantee Only Members (i.e. those without Full Membership, esp. casual employees) and is therefore reported on payslips only for the last pay period in the month. There is no super guarantee reported on payslips for the first pay period. When three pay periods occur in the calendar month, SG is not reported for the first two periods.
Can I vary my contribution rate?
SSS Members - the contribution rate is determined by the fund. You may elect to salary sacrifice the contribution.
SASS Members - The fund offers members the opportunity to vary the percentage between 1% and 9% each year through an annual advice to members. You may elect to salary sacrifice the contribution.
UniSuper Members - UniSuper offers members a contribution flexibility guide. Members should read the information carefully. You may elect to salary sacrifice the contribution.
Why 8.25% rather than 7%?
Government legislation requires that tax be deducted from superannuation contributions. These are all employer contributions, and any contributions you make from your before-tax (salary sacrifice) pay. The current contributions tax rate is 15%.
This means that your contribution rate needs to be increased so that you make the same net contribution to your super fund that you would have made through after-tax contributions. For example, if you elect to contribute at 6%, you would need to contribute 7.06% of salary, i.e. an additional 1.06% of salary on a before-tax basis. (Formula: Contribution Rate ÷ 0.85)
What is the Co-Contribution Scheme?
The Super Co-contribution is an Australian Government initiative to assist eligible individuals to save for their retirement. If you are eligible and make personal superannuation contributions, the Government will match your contribution with a co-contribution up to certain limits.
You will be eligible for the co-contribution in a year of income if:
- you make personal superannuation contributions to a complying superannuation fund or a retirement savings account (RSA)
- your ‘ total income’ (assessable income plus reportable fringe benefits) is less than $58,000 (This may be different to your taxable income)
- 10% or more of your total income is from eligible employment
- you do not hold an eligible temporary resident visa at any time during the year
- you lodge an income tax return for the year of income, and
- you are less than 71 years old at the end of the year of income.