New year, new… super contributions!

ESSSuper - 05 Mar 2021

What's the most rewarding resolution you'll keep this year?

New Year's resolutions such as budgeting or getting fit are often made with the best intentions but can be completely forgotten soon enough. Behavioural experts recommend that one of the best ways to keep a long-term resolution is to start with small steps. And that applies as much to saving towards your future as it does to going to the gym.

Small steps such as adding additional money to your super and tweaking your investment option(s) can make a difference over the long term. And you can do it online! To see what kind of effect these changes may have on your balance, check out our Lifetime Supermodeller.

Can you grow your super with extra contributions?

In addition to the mandatory contributions your employer makes, you can change the way you contribute in the following ways, depending on what type of super account (e.g. Defined Benefit (DB), Accumulation Plan, etc.) you have with us.^*

Excess tax may apply if you increase your contribution rate in a DB account opened before 5 September 2006. Refer to the 'What happens to my super if I increase my contribution rate?' section of our ESSS Defined Benefit Fund Members FAQ's (FS018) fact sheet to learn more.

Could you make extra contributions through salary sacrifice?

If you're already making the most of your DB membership and want to top up your super, we recommend you consider your options before taking any further action. DB accounts don't accept additional contributions to super. An Accumulation Plan can.

You can make salary sacrifice contributions from your earnings before income tax, if your employer allows it. You can also claim a tax deduction for after-tax contributions that aren't made to an ESSSuper DB fund. Your super contributions are taxed up to 15% which, depending on your income, can be a tax-effective option. Your contributions could be the equivalent of a cup of coffee a day, but over time those little 'sacrifices' now could result in a better lifestyle in retirement. Everybody's situation is different, so check our Salary Sacrifice Calculator to see if it's right for you.

Ask your employer about starting a salary sacrifice arrangement for super contributions. Salary sacrifice is only available to approved employees, under the conditions of your Enterprise Bargaining Agreement.

What other small steps can you take now?

What we've talked about so far are just some of the ways you can make the most of your super. You may also be able to:

• Receive co-contributions from the Government
• Find your super with other funds or money with the ATO, and
• Save on multiple fees by transferring (rolling over) your super into one account.

^* Caps (limits) apply to the amount of super contributions you can make or receive each financial year before there are tax implications.

There are maximum limits on before and after tax contributions which are set by the Government, and if these limits are exceeded you may be liable for additional tax. It is important that you monitor your contribution levels as they may change from year to year. Please read the Product Disclosure Statement relevant to your particular fund, available from ESSSuper, for more information. You should check any insurance arrangements that may be forfeited, or any other effects this transfer may have on your benefits, before rolling your money into our fund.

Benefits in ESSSuper’s Accumulation Plan, Income Streams and Beneficiary Account products are not guaranteed or underwritten by the Victorian Government or ESSSuper, and ESSSuper does not come under the jurisdiction of the Australian Financial Complaints Authority. ESSSuper comes under the jurisdiction of the Victorian Civil and Administrative Tribunal.

Emergency Services Superannuation Board (ABN 28 161 296 741), the Trustee of the Emergency Services Superannuation Scheme (ABN 85 894 637 037) (ESSSuper).

The information contained in this article is of a general nature only. It should not be considered as a substitute for reading ESSSuper’s Product Disclosure Statement (PDS) that contains detailed information about ESSSuper products, services and features. Before making a decision about an ESSSuper product, you should consider the appropriateness of the product to your personal objectives, financial situation and needs. It may also be beneficial to seek professional advice from a licensed financial planner or adviser. An ESSSuper PDS is available at esssuper.com.au/pds or by calling 1300 650 161.