Issued September Salary Sacrifice. Salary Sacrifice. Grow your super. and pay less tax

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1 Issued 12 Salary December 10 Sacrifice Salary Sacrifice Issued September 2015 Grow your super and pay less tax

2 What is salary sacrifice? Salary sacrifice is an arrangement with your employer to pay part of your gross (before-tax) pay directly into your super account. This is known as a concessional contribution and it can help grow your super while reducing your personal income tax. Personal contributions what s the difference? Personal (non-concessional) contributions are paid into your super from your after-tax pay. If you earn less than $50,454 p.a. * you may be eligible for the government co-contribution. To learn more, read our Money for Nothing brochure available from lucrf.com.au or call us on Super tip Rollover to help boost your super! If you re like most Australians, you may have more than one super account and be paying more than one set of fees. This eats away your retirement savings. Combining all your super into one LUCRF Super account can help to give your super an extra boost. It s a lot easier than most people think! Read more in our Rollover brochure available at lucrf.com.au or by calling us on * Total annual income amount includes assessable income, fringe benefits and reportable super contributions for the income year.

3 A little each pay does add up By salary sacrificing a little amount each pay, you can boost your super considerably without the need to budget for a large annual one-off contribution. Tax savings The super contribution tax rate is generally 15% on salary sacrifice payments and is less than most people s individual income tax rate (between 34.5% and 47%, including Medicare Levy). For further details regarding contribution tax levels please visit or call Salary sacrifice at a glance The table below shows how salary sacrificing from your gross pay (before-tax) can add to your super. Salary sacrifice weekly to super Decrease in weekly take home pay Annual Income tax saving Super at age 67 without salary sacrifice Super at age 67 with salary sacrifice $30 $19.65 $ $517,056 $575,572 $75 $48.96 $1, $517,056 $663,345 $125 $80.96 $2, $517,056 $760,870 $175 $ $3, $517,056 $858,396 Assumptions: 30 years of age, $25,000 in super, $70,000 annual income, Employer SG contribution of 9.5% increasing to 12% from 1 July 2022, 7% p.a. investment earnings, $1.50 per week administration fee, 0.69% investment management fee, $156 p.a. insurance premium and 3% inflation p.a. How much can you salary sacrifice? The total concessional contribution limit is currently $30,000 p.a. for people aged under 50 and $35,000 p.a. for people aged 50 and over. Any excess concessional contributions will be included in an individual s assessable income and include a penalty charge due to the Australian Tax Office (ATO) not receiving the tax as early as they would have if it had been received as income tax. Please note: your concessional contributions limit includes your employer Superannuation Guarantee (SG) and salary sacrifice contributions.

4 Request for payroll deduction Hand this form to your payroll department w If your employer allows additional contributions to be deducted from your before or after-tax pay, please complete this form and then hand directly to your payroll department. Step 1 Employer details LUCRF Super membership number (if known) Company payroll number (if known) Employee name (name of member) To the pay office (company name) I authorise you to deduct the following amount of superannuation contribution from my pay and remit to LUCRF Super Step 2 Contribution before-tax (salary sacrifice) Salary sacrifice Please commence my before-tax contribution of % or $ Using the following pay frequency Weekly Fortnightly Monthly Commencing from this future pay date (dd/mm/yyyy) / / Step 3 Contribution after-tax (personal contribution) Personal contribution Please commence my after-tax contribution of % $ or Using the following pay frequency Weekly Fortnightly Monthly Commencing from this future pay date (dd/mm/yyyy) / / EMPLOYER TO NOTE: After-tax contributions are required (by legislation) to be paid within 28 days of the end of the month in which they are deducted. Step 4 Authorisation This authority is effective until further notice from me. Member signature 7 Date (dd/mm/yyyy) / / If you need help completing this form, please call us on or mypartner@lucrf.com.au Issued September 2015 by L.U.C.R.F Pty Ltd ABN AFSL as Trustee for Labour Union Co-operative Retirement Fund ABN (LUCRF Super).

5 How to start salary sacrificing Complete the attached Request for payroll deduction form and hand it directly to your employer s payroll department. Your employer can also pay personal contributions directly into your LUCRF Super account from your after-tax pay. If you would like to do this, complete Step 3 of the attached form. Your employer will notify LUCRF Super of the contribution type and amount when making your superannuation payments. Important things to know about salary sacrifice Salary sacrifice arrangements are not available to everyone as not all employers will offer the option. If you are paid under an Award, you may not be able to sacrifice your salary to a level below what is stipulated in your Award. Tax treatment of salary sacrifice (before-tax) contributions is different to that of personal super contributions (after-tax), therefore it may not suit your circumstances. When making a decision, ask your employer which gross pay amount they will use to calculate your SG contributions will it be before or after your salary sacrifice has been deducted? Example: If you gross $50,000 p.a. and salary sacrifice $5,000 p.a., your employer may pay your SG contribution on $45,000 instead of the $50,000 you are earning. Ask your employer for clarification. If you are aged between 65 and 75 years, you will need to meet the work test conditions (which requires that you work a minimum of 40 hours in a continuous 30-day period during the financial year) to make either personal or salary sacrifice contributions to your super. If you are aged 75 or over, you are not eligible to contribute. Call and talk to a qualified LUCRF Super representative for personalised financial advice.

6 How salary sacrificing can pay off More super Salary sacrificing can make a big difference to your super balance when it is time to retire. Example of super savings on retirement: Retire with over $195,000 more by salary sacrificing David Is 30 years old Plans to retire at 67 Has a current account balance of $25,000 Has an annual income of $70,000, and Salary sacrifices $100 per week $722,205 minimum employer SG contribution + $100 per week salary sacrifice $527,153 minimum employer SG contribution only Assumptions: Employer SG contribution of 9.5% increasing to 12% from 1 July 2022, 7% annual investment earnings, 0.69% investment management fee, $1.50 weekly administration fee, $156 p.a. insurance premium and 3% inflation p.a. The above projection is meant as an estimate only and is not intended to be kept or used for practical purposes. Actual outcomes will depend on a range of factors outside the control of LUCRF Super. It is not intended to be used as a substitute for professional financial advice. Less tax The money you salary sacrifice into your super comes directly from your gross (before-tax) pay. Generally this money is taxed at the super contribution tax rate of 15% upon entry into your fund instead of your normal income tax rate (could be up to 47%, including Medicare Levy).

7 Contact LUCRF Super lucrf.com.au E mypartner@lucrf.com.au P PO Box 211 North Melbourne VIC 3051 Privacy Protecting your personal information is important to us. We collect, use, disclose and protect your personal information in accordance with our Personal Information Collection Statement and the Privacy Policy. Please read these documents at lucrf.com.au/privacy or by calling If you do not wish to receive direct marketing and educational material please contact us by phone, or post. Disclaimer This brochure is issued September 2015 by L.U.C.R.F Pty Ltd ABN AFSL as Trustee for Labour Union Co-Operative Retirement Fund ABN (LUCRF Super). The information provided is general in nature only and has been prepared without taking into account your personal financial situation, objectives or needs. You should assess your personal financial situation before making a decision. To help you decide we recommend you read our current Product Disclosure Statement (PDS). You can download this from our website or request a copy by calling us. LUCRF0102_0815