Frequently asked questions about BT Super for Life

Transcription

1 Frequently asked questions about BT Super for Life Information current as at: 1 July 2015 To be read in conjunction with the BT Super for Life PDS also found on this website. Contents Contributions caps 2 Concessional contributions cap 2 Non-concessional contributions cap 2 Capital Gains Tax (CGT) cap 2 Monitoring contributions cap amounts 2 How super is taxed 3 Eligible bank accounts 4 Who is managing my money? 5 Further detail concerning Environmental, Social and Corporate Governance ( ESG ) 5 Other information about super 7 Family law 7 Contributions splitting 7

2 Contributions When can money be added to my super? When money can be contributed to your super depends on your age and the type of contribution that you, your employer or spouse wishes to make on your behalf. The following table summarises when contributions can be made to your super: YOUR SITUATION EMPLOYER CONTRIBUTION OTHER CONTRIBUTION TYPES Super Guarantee (SG) Award Salary sacrifice and voluntary Personal 1 Spouse ROLLOVERS You are under age 65 You are aged between 65 and 69 inclusively and are: 1. gainfully employed 2 2. NOT gainfully employed 2 You are aged between 70 and 74 inclusively and are: 1. gainfully employed 2 2. NOT gainfully employed 2 You are aged 75 3 or older Contributions caps What are the limits that apply to super contributions? Contributions that exceed your contributions caps (shown in the two tables below) may have additional tax applied to them. Concessional contributions cap for 2015/16 AGE ON THE LAST DAY OF THE FINANCIAL YEAR for individuals aged 49 years or over on 30 June 2015 CONCESSIONAL CONTRIBUTIONS ANNUAL CAP FOR 2015/16 $35,000 for individuals aged 48 years or under as at 30 June 2015 $30,000 indexed to AWOTE 4 rounded down to the nearest $5,000 in subsequent financial years. WHICH CONTRIBUTIONS COUNT TOWARDS MY CONCESSIONAL CONTRIBUTION CAP? Contributions assessed against your concessional contributions cap include: Employer contributions including SG, Award, voluntary, and salary sacrifice contributions Personal tax deductible contribution (ie contributions for which a personal tax deduction is claimed) A higher concessional contributions cap of $35,000 per financial year (un-indexed) will be available for individuals aged 49 or over on 30 June For everyone else the standard $30,000 concessional contributions cap applies. 1_ If eligible, you may be able to claim a tax deduction for your personal contributions. You must complete a Notice of intent to claim or vary a personal tax deduction form (available at bt.com.au or by calling us) and have received an acknowledgement from us, before claiming personal contributions as a tax deduction in your tax return. Please refer to the Additional Information Booklet for further information. 2_ Gainfully employed means employed or self-employed (for gain or reward) for at least 40 hours in a period of not more than 30 consecutive days in the financial year in which the contribution is made. 3_ Other than for mandated employer contributions, the contribution must be received on or before the day that is 28 days after the end of the month in which you turn 75 where the gainful employment test as described above has been met. 4_ AWOTE is the measure of average weekly ordinary time earnings published by the Australian Bureau of Statistics. 2

3 Non-concessional contributions cap AGE ON THE LAST DAY OF THE FINANCIAL YEAR ANNUAL CAP 2015/16 FUND CAP 2015/16 Less than 65 $180,000 annually or you can bring forward up to two years worth of $540,000 non-concessional contributions to contribute up to $540,000 over a three year period Aged from 65 to 74 $180,000 $180, or over $0 contributions assessed against the non-concessional cap cannot Not applicable be made WHICH CONTRIBUTIONS COUNT TOWARDS MY NON-CONCESSIONAL CONTRIBUTION CAP? Contributions assessed against your non-concessional contributions cap include: Personal contributions for which you are not claiming a tax deduction Contributions made by your spouse into your account Contributions made with proceeds from the sale of small business assets that are in excess of the Capital Gains Tax (CGT) cap Excess concessional contributions that are not refunded to you. Note: if you triggered the bring forward non-concessional cap in the 2013/14 financial year, your relevant non-concessional cap under this rule will be $450,000 until the end of the 3 year period. For further information contact your financial adviser. Capital Gains Tax (CGT) cap A contribution made from certain amounts arising from the disposal of qualifying small business assets may count against the CGT cap, provided it is a personal contribution for which no tax deduction is claimed and an ATO election form is provided at the time the contribution is made. The CGT cap is a lifetime limit of $1,395,000 (for 2015/16) indexed to AWOTE* rounded down to the nearest $5,000 in following years). The rules about which amounts will qualify for contribution under the CGT cap are complex. You should consult a qualified professional adviser to determine whether your contributions qualify for the CGT cap. Monitoring contributions cap amounts It is your responsibility to make sure that you don t exceed the caps detailed in this section, as we cannot monitor your overall contributions cap position. BT Super for Life does not do this for you. BT Super for Life is generally unable, however, to accept a single amount paid by you (for which you will not claim a tax deduction) which is in excess of $540,000 (or $180,000 if you are 65 or over on 1 July in the year in which the contribution is received by BT Super for Life). The amount in excess of $540,000 (or $180,000) will be returned to you. How super is taxed You may also wish to refer to the ATO website for the latest information. Low income superannuation contribution (LISC) From 1 July 2012 until 30 June 2017, the LISC effectively returns the amount of tax paid on concessional contributions to superannuation for eligible low income earners. You will generally be eligible for a LISC if your adjustable taxable income does not exceed $37,000 and at least 10% of your income is sourced from employment or business sources. The amount of LISC payable will be calculated as 15% of the total concessional contributions made by you or on your behalf for the financial year, up to a maximum of $500. If you are eligible for the LISC the ATO will automatically make the payment into your super account. Government co-contributions The maximum government co-contribution for 2015/16 is $500. The co-contribution thresholds for 2014/15 and 2015/16 are shown below. Further information on co-contributions and eligibility is available from / /15 Maximum income for full co-contribution $35,454 $34,488 Maximum co-contribution amount $500 $500 Maximum income for partial co-contribution $50,454 $49,488 * AWOTE is the measure of average weekly ordinary time earnings published by the Australian Bureau of Statistics. 3

4 Introduction of a Temporary Budget Repair Levy The following rates incorporate the Temporary Budget Repair Levy (TBR Levy) which is applicable for the 2014/15, 2015/16 and 2016/17 financial years. For more information please refer to Tax rates The following table illustrates the tax rates that may impact contributions made into your account: TAX RATES 1 No TFN tax Tax on excess concessional contributions Tax on excess non-concessional contributions Tax on notional earnings Top marginal rate of tax WITH TBR LEVY 34% (including Medicare Levy) Up to 34% (including Medicare Levy) on top of the 15% already paid by the fund 49% (including Medicare Levy) if not released from super. If released from super tax is only payable on the notional earnings Your marginal rate of tax (up to 49%) less a 15% tax offset for the tax already paid by the fund 49% (including Medicare Levy) 1_ Medicare Levy is 2% from 1 July 2014 Eligible bank accounts BT Super for Life can process your redemption promptly into an eligible Westpac Group bank account. These are outlined below. If you hold a bank account with another financial institution, you will need to provide proof of identification in order to meet AML/CTF legislative requirements before we can redeem your super funds. ST GEORGE/BANK SA ELIGIBLE ACCOUNTS Complete Freedom Complete Freedom Offset Express Freedom Freedom Account Freedom Cheque Freedom Offset Freedom Offset Cheque Freedom Plus Investment Cash Account Portfolio Cash Management Account Portfolio Cash Management Account Cheque Option Power Saver Account Retirement Access Plus Retirement Access Plus Cheque Simply Freedom WESTPAC ELIGIBLE ACCOUNTS Westpac Choice Westpac Choice eaccount Westpac Reward Saver Westpac Cash Manager Westpac One Westpac One Basic Westpac One Premium Westpac Business One Westpac Business Flexi Account Classic Plus Basic Account Deeming Account Classic Account Bonus Saver Cash Management Account Business Cheque Account Business Cheque Plus Account Business Cash Management Account Advantage Saver Private Bank Deposit Bearing Interest BANK OF MELBOURNE ELIGIBLE ACCOUNTS Complete Freedom Complete Freedom Offset Express Freedom Freedom Account Freedom Cheque Freedom Offset Freedom Offset Cheque Freedom Plus Investment Cash Account Portfolio Cash Management Account Portfolio Cash Management Account Cheque Option Power Saver Account Retirement Access Plus Retirement Access Plus Cheque Simply Freedom Bank of Melbourne Sense 4

5 Who is managing my money? BT Super for Life selects Australia s and the world s leading investment managers in each asset class, mixed in a way that lets investors enjoy the best possible returns for their risk appetite. These investment managers can change from time to time. Fund managers include: AMP Capital Investors Ltd AQR Capital Management LLC BT Investment Management Ltd European Investors Franklin Templeton Kapstream Capital Pty Ltd Lazard Asset Management MFS Institutional Advisors Inc Northcape Capital Pty Ltd Perennial Investment Partners Ltd Phoenix Portfolios Pty Ltd Principal Global Investors (Australia) Ltd Schroder Investment Management Australia Ltd State Street Global Advisors Australia Ltd Trilogy Global Advisors LLC Wellington Management. For a complete list of investment managers, please go to bt.com.au. Further detail concerning Environmental, Social and Corporate Governance ( ESG ) What are the Principles for Responsible Investment (PRI)? The Principles for Responsible Investment (PRI) were developed by an international group of institutional investors reflecting the increasing relevance of environmental, social and corporate governance (ESG) issues to investment practices. The united nations supported initiative is an international network of investors working together to put the six Principles for Responsible Investment into practice. Its goal is to understand the implications of sustainability for investors and support signatories to incorporate these issues into their investment decision making and ownership practices. In implementing the Principles, signatories contribute to the development of a more sustainable global financial system. BT Financial Group has been a signatory to the Principles since 2007, shortly after the initiative was launched. As signatories to the PRI, we believe that ESG issues can affect the performance of investment options (to varying degrees across securities, sectors, regions, asset classes and through time). We also recognise that applying the Principles may better align investments with the broader objectives of society. The six principles are: Therefore, where consistent with our fiduciary responsibilities, we commit to the following: 1) We will incorporate ESG issues into investment analysis and decision-making processes. 2) We will be active owners and incorporate ESG issues into our ownership policies and practices. 3) We will seek appropriate disclosure on ESG issues by the entities in which we invest. 4) We will promote acceptance and implementation of the Principles within the investment industry. 5) We will work together to enhance our effectiveness in implementing the Principles. 6) We will each report on our activities and progress towards implementing the Principles. More information concerning the PRI can be found at: The PRI Initiative supports signatories efforts in their implementation of the Principles for Responsible Investment through the annual reporting and assessment process. Reporting is one of the mandatory requirements for all asset owner and investment manager signatories. BT Financial Group s public report can be found at: 5

6 Dow Jones Sustainability Indices The Dow Jones Sustainability Indices ( DJSI ) were launched in 1999 as the first global sustainability benchmarks. The indices are offered cooperatively by RobecoSAM and S&P Dow Jones Indices. The family tracks the stock performance of the world s leading companies in terms of economic, environmental and social criteria. The indices serve as benchmarks for investors who integrate sustainability considerations into their portfolios, and provide an effective engagement platform for companies who want to adopt sustainable best practices. Their investment decisions are based on two practical guiding principles: sustainable business practices are critical to the creation of long-term stakeholder value in an increasingly resource-constrained world in a competitive environment, sustainability factors represent risks as well as opportunities for companies. They aim to actively integrate these factors into their investment process. SAM Group Holdings SAM Group Holdings ( SAM ) describes itself as a global investment boutique focused exclusively on Sustainability Investing. SAM uses financial markets as the most powerful transmission mechanism to promote sustainable business practices. With an exclusive focus on Sustainability Investing, SAM provides a unique and broad range of sustainability solutions. SAM uses industry-specific criteria to assess economic, environmental, and social aspects of companies and, ultimately, investability, using its Corporate Sustainability Assessment (CSA). SAM Group uses proprietary methodology to look at 58 sectors with CSA and claims to have one of the world s largest corporate sustainability databases. SAM analyses sustainability-related information from over 2,000 exchange-listed companies a year. More information concerning DJSI and SAM can be found at and 6

7 Other information about super Family law Part of the Family Law Act 1975 (the Act) deals with the treatment of superannuation on relationship* or marriage breakdown. The Act provides that a member s superannuation benefit may be split with the member s spouse** or former spouse on relationship or marriage breakdown. Alternatively, a payment flag may be imposed on the member s superannuation benefit. In order for the Trustee to commence any payment split or impose a payment flag, the Trustee must have been served with either: a superannuation agreement made in accordance with the Act; or an Order of the Family Court of Australia, that specifies how your benefit is to be split with your spouse or former spouse, or that a payment flag must be applied to your account. The Act specifies that the Trustee must be provided with certain evidence of marriage or relationship breakdown. You or your former spouse may arrange for the required documents to be served on us. For the purposes of the Act, documents can only be served on us at the following address: Professional advice The Act involves many complex requirements in relation to splitting a superannuation benefit. It is recommended that, if you believe your BT Super benefit will be affected by the Act, you should consult your legal adviser, financial adviser and/or accountant. Contributions splitting Superannuation contribution splitting allows you to split certain superannuation contributions made during a financial year to your spouse s superannuation account. It is a way for your spouse to grow their own superannuation, even if they have a low income or they are not working. Splitting your superannuation contributions may provide you and your spouse more choices in how to prepare for your retirement. To split contributions, you and your spouse will need to complete a BT Super for Life Contributions Splitting application form. To find out more about Contribution Splitting, including limits and eligibility conditions, and to obtain the BT Super for Life Contributions splitting application form, log into internet banking, click on your BT Super for Life account, and select Forms and publications in the left menu. Family Law and Superannuation Officer Legal Department BT Funds Management Limited Level 20, 275 Kent Street, Sydney NSW 2000 All documents served on us should be either an original or a certified copy. For more information, go to Information about your super benefit If the Trustee is required to affect a payment split on your benefit, the value of your account will reduce by the amount that is paid to, or for the benefit of, your spouse or former spouse. Information about your superannuation benefit Where an eligible person under the Act wishes to negotiate a superannuation agreement with you (which may be before or during a relationship, or after relationship breakdown) or facilitate the preparation of an order of the Family Court, they may apply to the Trustee to receive information about your benefit. Where the application is made in accordance with the requirements of the Act, the Trustee will be obliged to provide the requested information and will not be permitted to inform you about the application. * Legislation to expand the Family Law Act to cover relationship breakdown as well as marriage breakdown is effective from 1 July 2010 for South Australia and from 1 March 2009 for all other States and Territories (with the current exception of Western Australia). ** Your spouse includes: your husband or wife via marriage; or your de facto partner or any other person with whom you are in a relationship (provided that this relationship is registered under a certain state or territory law); or another person who, although not legally married to you, lives with you on a genuine domestic basis in a relationship as a couple. 7

8 For more information bt.com.au BT sx