Navigator has collected more than A$1.5 million for 2,500 Navigator clients from the government’s co-contribution scheme aimed at boosting superannuation balances for lower income earning Australians.
Navigator has collected more than A$1.5 million for 2,500 Navigator clients from the government’s co-contribution scheme aimed at boosting superannuation balances for lower income earning Australians.
Navigator’s chief operating officer, Grant Salmon, says this shows Navigator clients are starting to heed the message to increase their superannuation and are making the most of government initiatives.
“The co-contribution is essentially extra money – and at Navigator there are a substantial amount of clients who have realised this – and I would encourage all eligible Australians to take up this offer,” said Grant.
The Federal Government’s Co-Contribution scheme encourages people to make a personal contribution into their superannuation which will then be matched with a co-contribution of up to A$1,500 (where eligible).
The table below shows a number of scenarios highlighting the total growth of a superannuation fund when receiving superannuation guarantee and making a A$1,000 personal contribution topped up by a government co-contribution.
| At age | Annual salary | SG only super built up | * Member contribution | Max Co-cont Avail | AT AGE 65 | ||
|---|---|---|---|---|---|---|---|
| SG only | Extra value from member contri- bution and co-cont | Value of total contrib- utions (including 9% SG) | |||||
| 30 | $40,000 | $15,000 | $1000.00 | $900.00 | $252,000 | $99,500 | $378,000 |
| 40 | $40,000 | $60,000 | $1000.00 | $900.00 | $258,000 | $58,500 | $332,000 |
| 30 | $50,000 | $20,000 | $1000.00 | $400.00 | $319,000 | $44,000 | $412,000 |
| 40 | $50,000 | $80,000 | $1000.00 | $400.00 | $334,000 | $26,000 | $389,000 |
Calculations are in today’s dollars – assumes investment rate of return from growth assets of 4% pa after all fees and fund tax on investment earning at 15%. 4% pa has been used rather than, say, 7% pa and an assumption of 3% pa inflation, so that spending power of end result is comparable to today’s prices. Balances at ages 30 and 40 are assumptions. Values are before any tax on benefits.
* Please note contributions do not need to be A$1000 – individuals can contribute more of less than this amount each year.
“A$1,000 a year is not a lot of money – particularly when it is spread throughout the whole year – it works out that you only have to commit just A$19.24 of your money a week and you could end up more than doubling your super contribution for the year. And that’s on top of the superannuation your employer pays for you,” says Grant.
In all of the examples in the table, the balances taking into consideration the additional personal contribution and co-contribution are closer to the A$520,000[1] research shows people believe they need for a comfortable retirement.
Already 450,000 Australians have received co-contribution payments for the 2003/04 financial year. This figure is expected to grow significantly in the next year as the Government has now extended this offer from those earning less than A$40,000 to those earning less than A$58,000[2].
“I suggest that those who are eligible should consider joining those people who have already made the decision to boost their super – and make the most of the government’s offer to double your money in many cases – make sure you enjoy your retirement,” said Grant.
For further information on your superannuation needs please contact a financial adviser.
-ends-
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Notes to editors:
- Aviva Australia is a group of two specialist financial services companies: Navigator and Norwich Union Life Australia Ltd. Portfolio Partners is the Australian funds management arm of Aviva plc. Through these companies we provide products and services in the areas of wealth creation and wealth protection for more than 300,000 customers throughout Australia.
- Globally, Aviva Australia is part of Aviva plc, the world’s fifth 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.
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- 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. Aviva does not receive any remuneration in relation to the provision of information available from this press release which is of a general nature only.
[1] Kelly, S, Forecasting wealth in an ageing Australia – an approach using dynamic microsimulation, National Centre for Social and Economic Modelling, Canberra, June 2003.
[2] Media Release, The Hon Mal Brough MP, $244m injection into Australian’s retirement savings, Canberra, February 2005.