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Canberra

Level 1, 29 Bentham Street
Yarralumla, ACT 2600
Ph: 1300 272 843
Email: info@bravien.com

Brisbane

Suite 9, 60 Macgregor Terrace
Bardon, QLD 4065
Ph: 1300 272 843
Email: info@bravien.com


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NEWS ALERT:
PUBLIC SERVICE Defined benefit super
from 1 July 2017

Advice

Superannuation | Retirement | Aged Care

Investment | Insurance
1300 272 843

YOU MUST REVIEW YOUR SALARY SACRIFICE TO SUPER

IMPORTANT for CSS: If you are a member of CSS and you earn over $175,000 pa - you must cease all salary sacrifice to your private, self managed or external super from 1 July 2017. Contact your payroll as soon as possible to make this change.

IMPORTANT for PSS: If you are a member of PSS and you earn over $288,000 pa - you must cease all salary sacrifice to private, self managed or external super from 1 July 2017. Contact your payroll as soon as possible to make this change.

IMPORTANT for DFRDB: If you are a member of DFRDB and you earn over $233,000 pa - you must cease all salary sacrifice to private, self managed or external super from 1 July 2017. Contact your payroll as soon as possible to make this change.

IMPORTANT for MSBS: If you are a member of MSBS and you earn over $197,000 pa - you must cease all salary sacrifice to private, self managed or external super from 1 July 2017. Contact your payroll as soon as possible to make this change.

At all other pay levels in all schemes, you will need to dramatically reduce your salary sacrifice due to the new calculation of your "notional defined benefit contribution". More information and important calculators below.


DETAIL:

From 1 July 2017, Comsuper will be required to calculate and report a ‘notional defined benefit contribution’ against your reduced concessional contributions cap of $25,000.

Previously, your reportable concessional contributions consisted of only your employer productivity contributions (about 2-3% of your wage) and the caps were higher at $30,000 or $35,000. This is why we could achieve such great levels of super savings, personal tax savings, and greatly enhance retirement lifestyle with tax free pensions.

From 1 July 2017, Comsuper is also required to report a notional defined benefit contribution amount towards the concessional contributions cap. The notional defined benefit contribution is determined by actuarial formula and is reported to the ATO at the end of each financial year. And the notional amount is BIG - which eats into the reduced $25,000 cap much faster and results in the need to dramatically reduce your salary sacrifice to super. If you exceed the contributions cap, you are forced to remove the excess from super and pay top up tax.

It should be noted that the calculation of the notional defined benefit component is complex. We strongly encourage you to contact us asap if salary sacrifice is part of your strategy. This will help to ensure you do not breach the new $25,000 cap.

Calculators to determine your reportable amount and remaining cap are available online as below. To calculate your maximum salary sacrifice per fortnight:

  1. Login to your CSS / PSS member services using your AGS number, date of birth and access code. Call 1300 000 277 if you do not have these details.
  2. Click "Concessional Contributions Cap Calculator" and determine your remaining cap as shown in the results.
  3. Divide remaining cap by 26.
  4. Round down to nearest $10.
  5. Contact payroll asap to make the change.
  1. DFRDB / MSBS have created calculators online that do not require you to login. You simply need to enter your wage (super salary) and click "Estimate" at the bottom of the screen.
  2. Divide remaining cap by 26.
  3. Round down to nearest $10.
  4. Contact payroll asap to make the change.

Remember that bonuses or pay rises within the financial year will affect this calculation of maximum salary sacrifice far greater than previously - so you must factor in these possibilities and further reduce your gap.

By all means, call us at any time - 1300 272 843.

 

Important information
This provides general information and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances before deciding what’s right for you. Although the information is from sources considered reliable, Bravien Financial does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any investment decision. Except where liability under any statute cannot be excluded, Bravien Financial does not accept any liability (whether under contract, tort or otherwise) for any resulting loss or damage of the reader or any other person.



 

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