The introduction of Choice of Superannuation Fund (on 1 July 2005) provides young Australians the opportunity to control their own superannuation and boost their retirement savings by actively managing where their super savings will be.
The introduction of Choice of Superannuation Fund (on 1 July 2005) provides young Australians the opportunity to control their own superannuation and boost their retirement savings by actively managing where their super savings will be.
Right now, the 16 to 34 age group (generation x and y) are in the best position to grow their superannuation balances with 88 per cent of this group having at least some money in superannuation.1
The medium balance may only be worth about $14,0002 but there are still more than 30 working years to go in the traditional concept of the workforce.
And the Federal Government’s co-contribution scheme, may help grow these balances quickly, so long as young people recognise the opportunity and are prepared to make some small sacrifices now to help ensure their wellbeing in retirement.
The below graph highlights the co-contribution a person may be eligible for based on their income and personal contributions made into super for the year commencing 1 July 2004. (note other limitations and eligibility criteria exist)
| Your assessable income and reportable fringe benefits are: | - so you can make this personal contribution | And get this Government co-contribution | To have this amount in super |
|---|---|---|---|
| $6,000 or less | $1,000 | $1,500 | $2,500 |
| $21,600 or less | $1,000 | $1,500 | $2,500 |
| $28,000 or less | $1,000 | $1,500 | $2,500 |
| $35,000 | $767 - $1,000 | $1,150 | $1,917 - $2,150 |
| $40,000 | $600 - $1,000 | $900 | $1,500 - $1,900 |
| $50,000 | $267 - $1,000 | $400 | $667 - $1,400 |
| $55,000 | $100 - $1,000 | $150 | $250 - $1,150 |
| $58,000 + | n/a | $0 | n/a |
+ Source: Navigator – Now the Government can add to your super, July 2004.
For some young people starting out on entry level salaries they may be able to claim the co-contribution for a number of years.
Aviva’s chief operating officer, Grant Salmon calls on young people to get serious about their super and find out all they can about Choice of Fund when they start working.
"The advent of choice of superannuation fund and the Government co-contribution provides opportunities for many Australians. It’s very simple really – it’s about taking control of your future finances," said Grant.
"When young people begin working it should almost be automatic for their family or mature friend to take them to see a financial planner to get their finances sorted out. This doesn’t mean young people have to give up ‘spending’ it just means every opportunity is realised, and every advantage gained, right from the beginning."
For more information on Choice of Superannuation Fund, the Government’s co-contribution scheme or any other financial issues please contact a financial adviser.
-ends-
1Reserve Bank of Australia, The composition and distribution of households assets and liabilities: evidence from the 2002 HILDA survey, April 2004.
2National Centre for Social and Economic Modelling, Income and Wealth of Generation X, Canberra, November 2003.
For further information please contact:
Simon Morgan
Group General Manager Public Affairs
Phone: (03) 9829 8892
Mobile: 0407 966 632
Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners, the Australian funds management arm of Aviva plc, is a sister company. Through these companies we provide products and services in the areas of wealth creation, wealth management and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world’s seventh largest insurance group, the largest insurer in the UK and one of the top five life companies in Europe. Aviva was formed in May 2000 through the global merger of CGU plc and Norwich Union plc.
- Aviva is a leading provider of life and pensions products to Europe and has substantial businesses elsewhere around the world. Its main activities are long-term savings, fund management and general insurance. It has premium income and investment sales from continuing operations of A$78 billion, and more than A$624 billion of assets under management (as at 1 July 2004). The group has more than 56,000 employees and 30 million customers worldwide.
- The information in this document reflects Navigator Australia Limited's ('Navigator’) understanding of existing legislation, proposed legislation, rulings etc as at the date of issue. In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, this is not guaranteed in any way. The information given in this document is of a general nature and has not taken into account the investment objectives, financial situation or particular needs of any particular person and it is not a substitute for professional advice. Applications to invest in a financial product issued by Navigator, or any of its related entities, must be made by completing the application form attached to the applicable Product Disclosure Statement ("PDS"). A PDS is available from Navigator or your financial adviser. Before making an investment decision on the basis of the information above, a prospective investor needs to consider, with or without the assistance of a professional adviser whether the information is appropriate in the light of their particular investment needs, objectives and financial circumstances.