An introduction to superannuation and your AvSuper membership.

1. Understanding
superannuation
Presented by
Silas Dingiria,
Member Services
Manager
1

2. Disclaimer
The following information is general advice and was prepared
without taking into account your objectives, financial situation
or needs. Therefore you should consider the appropriateness
of the advice in light of your personal situation before acting
on the advice.
An AvSuper Product Disclosure Statement on any financial
product mentioned in this document should also be obtained
and read prior to proceeding with an investment decision.

3. A brief history
of Australian
Superannuation
and Retirement
Pensions

4. A brief history of Superannuation and
Retirement Pensions in Australia
1862 Introduction of superannuation to Australia
1900 NSW introduces a means tested age pension of £26 pa
1973
Only 32% of working Australians covered by
Superannuation
1983
The Hawke Government expresses support for the
principles of employee Superannuation with employers
obligated to contribute 3% rising to 6% over time
1990 AvSuper established
1992 Compulsory Superannuation commenced 1 July
1992 Superannuation assets at $148 billion
(estimated by Reserve Bank of Australia)
2015 Superannuation assets estimated at $2,022 billion
2015
The Association of Superannuation Funds of Australia
(ASFA) statistics – 30.7 million super accounts in Australia

5. A brief history continued…
What does this mean for me?
1. Compulsory Super contributions for the entire working life
of those starting work after 1991.
Thus more in super and, in theory, a more comfortable
retirement.
2. In 15 years super assets have grown by over a TRILLION
dollars
3. Extreme pressure on social security system (Age Pension)
when the baby boomer generation retires.
Baby Boomers accounted for 69% of workers in 2009
(5.6 million out of 8.1 million full time employees)
4. ABS statistics at 30 July 2015
– 23.9 million Australians
– 8,170,400 full time employees

6. An Overview of
Superannuation
Rules in
Australia

7. Accessing your super
Date of Birth Preservation Age
Before 1 July 1960 55
1 July 1960 - 30 June 1961 56
1 July 1961 - 30 June 1962 57
1 July 1962 - 30 June 1963 58
1 July 1963 - 30 June 1964 59
From 1 July 1964 60
• when you reach your ‘preservation’ age & permanently retire
• when you reach age 60 and cease your current employment
• when you reach age 65

8. Accessing your super
cont’d
You may be able to access super
early through
• Terminal illness
• Financial hardship
• Compassionate grounds
Note specific criteria must be met to be eligible
for such claims.

9. Nominating super beneficiaries
Non-binding
• Provides direction to the Trustee
• Can be changed via Member Online or a form
• No expiry date
Binding
• Legally binding so Trustee must follow it
• Must be valid and less than 3 years old
• Can be changed by completing a form and
having it witnessed
Remember to update it periodically
and for major life changes

10. Taxation Treatment
Tax on contributions
Concessional (Employer & salary sacrifice) contributions are generally
taxed at 15%
Tax on investment earnings
Investment earnings of super are taxed at a maximum rate of 15%
Tax if you don’t provide your Tax File Number (TFN)
By not providing your TFN you may pay up to 45% (plus Medicare
levy) contributions tax
Tax on withdrawals
Tax on withdrawals varies depending on age and other characteristics
All super accounts have a taxable and tax free component. Tax on the
taxable component is applied as:
– 22% for people below preservation age
– 17% for people between preservation age and age 59
– Nil tax for people aged 60 and above
Note: A low rate cap applies in certain circumstances which may
reduce tax on the taxable component

11. Super
contributions

12. Types of contributions
• Superannuation Guarantee (employer)
• Salary sacrifice contributions (pre-tax)
• Member voluntary contributions (post-tax)
• Spouse contributions (post-tax)
• Government low income contribution
• Government co-contribution

13. Ordinary time earnings (OTE)
Employer contributions are calculated as a % of your OTE,
which generally
Includes: Examples
Awards & agreements Usual hours, casual shift-loadings
Allowances Danger, retention, unconditional extra payment
Payment of expenses Return to work (under workers compensation)
Leave payments Annual leave, sick leave, long service leave
Bonuses Performance, Christmas, ‘ex-gratia’ for ordinary hours
Other Commissions, termination pay (in lieu of notice)
Excludes: Examples
Over time amounts Hourly rates, loadings, annualised rates, lump sum payments,
casual employees
Payment of expenses Reimbursements, unfair dismissal, petty cash
Leave payments Parental, jury duty, defence reserve service
Bonuses For overtime
Other Termination pay (unused sick, annual or long service leave)

14. Contribution
type
Contribution
limit
Before-tax
contributions
(concessional)
• employer
• salary sacrifice
• self-employed
$30,000 pa (indexed)
$35,000 pa if over 49
(not indexed)
After-tax
contributions
(non-concessional)
• after-tax voluntary
• spouse
$180,000 pa
(6 x concessional limit)
If under 65 can pay
$540,000 in one year, then
$0 for next 2 years.
Super contribution limits

15. Government Co-Contribution
from 1 July 2015
• $0.50 for each $1.00 you contribute after
tax, up to a maximum of $500 (where
your total income is less than $35,454)
• The co-contribution is reduced if your
total income is $35,454 - $50,454
• 10% or more of your total income must
be from employment, running a business
or a combination of both
Other eligibility criteria also apply

16. Spouse contributions
If you make a contribution for your spouse
you may be able to claim a tax offset up to
$540 per financial year:
• 18% of contributions up to $3,000
• spouse’s total income is $10,800 or less
• reduces by $1 for each $1 over $10,800
• is nil if your spouse earns $13,800 or more

17. To be eligible for the Spouse
Contribution tax offset
• You did not claim a tax deduction for
the contributions
• Both you and your spouse were
Australian residents when the
contributions were made
• Your spouse’s assessable income +
total reportable Fringe Benefits
amounts are less than $13,800

18. Contributions splitting
• You can split concessional
(before–tax) contributions
with your spouse
• You can only split
concessional contributions
made to an accumulation
account
• Contribution splitting is limited to a maximum of
85% of your concessional contributions
• Contributions exceeding your concessional
limit cannot be split
Note: You can only split contributions made
in the previous financial year

19. Investments
and
superannuation

20. Asset classes explained
Growth assets
• e.g. shares and property
• higher risk but also have the potential for
higher returns, especially over the long term
Defensive assets
• e.g. cash and fixed interest (bonds)
• lower risk but generally provide lower returns

21. Investment Options and performance
As at 30 June 2015
Investment
Options
Defensive Growth 1 year 3 year* 10 year*
Growth (MySuper) 20% 80% 8.5% 13.2% 5.8%
Conservative Growth 70% 30% 4.6% 7.2% -
Stable Growth 50% 50% 6.4% 9.7% 5.8%
Balanced Growth^ 35% 65% - - -
High Growth 0% 100% 10.6% 16.9% 6.4%
Australian Shares 0% 100% 5.4% 16.4% -
International Shares 0% 100% 14.3% 18.1% -
Cash 100% 0% 2.4% 3.1% 4.1%
* Compound average returns
^ Introduced on 1 July 2015

22. Member Investment Choice (MIC)
• Eight investment options available to suit
your risk profile and retirement horizon
• No switching fees and you can switch as
many times as you like
• Current balances and future contributions
and rollovers can be invested differently

23. Growth (MySuper)
investment option
The default option for members not
making a choice
0.77% investment management fee
Primary objective:
(a return after fees & taxes above CPI)

24. AvSuper
Insurance

25. AvSuper Insurance
• 2 units of Automatic cover is provided for
Death and Total & Permanent Disablement
(TPD) – you can choose to opt out
• You can apply for additional cover and
Income Protection cover
• Premiums
– deducted from your account monthly
– based on your age and number of units
• Pre-approved cover increases for
major events
Term, conditions and eligibility rules apply

26. Income Protection (IP) Cover
• Short Term cover - payable for up to 2 years
• Long Term cover – payable up to age 60
• Your choice of 30, 90 or 180 day waiting period
• Cover up to 75% of salary
• An additional 10% salary can be insured as a
super contribution into your AvSuper account
You must be working at least 15 hours per week
to be eligible for this cover

27. Example insurance
cover
* Based on a male member at age 35 earning
$120,000 in a light blue collar occupation
Type of cover Number
of units
Amount of
cover
Annual
premium*
Automatic death and TPD 2 $131,000 $78
Death only 8 $524,000 $208
Death and TPD 8 $524,000 $312
Income Protection
short-term cover with 30 day
waiting period
$8,500 pm $551.65

28. After super…

29. Super Income Streams
• Same low fees and strong investment
returns as other AvSuper accounts
• Withdraw funds once you are retired –
tax free if over 60
• Any remaining balance can be paid to
your dependants or estate when you die
• Counts 100% towards the
Centrelink Asset test

30. AvSuper income streams
Full income stream Transition to retirement (TTR)
Retired Can still be working
Can with draw lump sums Can’t withdraw lump sums
Withdraw up to 100% of
balance each year
Withdraw up to 10% of balance
each year
Same fees, investment choice and member
benefits apply to both income stream types
• Access once you reach preservation age
• Cannot add money once opened
• Two types:

31. From super to Income
Stream
Earn a salary
9.50% employer contribution &
salary sacrifice into super
Transfer super into an income
stream
Draw down at least 4% a year as
an income stream

32. Qualifying for the
Government pension
• Centrelink does two eligibility tests
• Apply the lower rate to determine
your pension eligibility

33. More about YOUR fund

34. Other Features
• Anyone can join AvSuper
• Online account access
• Stay in AvSuper when
changing employers – and
industries
• Monthly investment update
on our website
• No contribution fees
• No fees to switch investment
options

35. AvSuper’s Member Advice
Solution
• Personal advice about insurance,
contributions, income streams
(including TTR) and investment
options available through your
AvSuper account – provided at
no additional cost
• Complex advice on retirement and
Centrelink as a fee-for-service
To make an appointment for personal advice,
Call 1800 805 088 or
email avsinfo@avsuper.com.au

36. Changing employers,
keeping your super
• Stay with AvSuper if you
change employers or stop
working
• New employers can
contribute to AvSuper for you
• Employer and personal
contributions can be made by
cheque or direct deposit

37. Rollovers to AvSuper
• Rollover amounts from other super funds -
keeping your money together can save on fees
• No entry fee is charged
• Your old fund may charge an exit fee
and you may lose other member benefits
when transferring
• You may be eligible to
transfer your existing
super insurance over
eRollover via Member Online – easy!

38. To find out more….
• Visit www.avsuper.com.au
• Call 1800 805 088
• Tweet twitter.com/aviationsuper
• Like facebook.com/AvSuper
• Visit us in Canberra
(off 25 Constitution Ave, opposite Airservices reception)