Australian Superannuation

Super is a way to save for your retirement and is a long-term investment. The Australian Government provides a range of incentives for people to save through super and therefore super is taxed differently from other investments and there can be significant tax advantages

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Contibrutions

There are limitations on contributions to, and withdrawals from, super. You usually cannot access super until you have attained your preservation age and have met what is called a condition of release.

You may choose to access your super savings as a regular income by electing to take your super through the Personal Pension product.

Contributions can be added to your ASF account right up until age 65, whether you are working or not. Once you turn 65, you can continue to contribute up until age 75, if you meet certain work tests.

If you are employed and perform any of your duties in Australia you employer will be required to make Superannuation Guarantee contributions for you.

Most employees have the right to choose the superannuation fund into which their compulsory employer contributions will be paid (choice of fund).

There are different types of contributions that can be made into your super account either as a one off or regular contributions:

-- After-tax contributions [non concessional] – these are contributions you make from your take home pay, after you have paid tax. Payments from a non-resident employer are taken to be non-concessional.

-- Taxed contributions [concessional] – these are contributions that your employer pays into ASF from your before-tax pay, such as Superannuation Guarantee contributions.

-- Transfers [including QROPS] - if you are at least 55 years old, then you may also apply to the Trustee to transfer in UK Tax-Relieved Scheme Funds [QROPS Funds]. You can also transfer your lost Australian super to the ASF and we can help you find it.

Please note that limits apply to the amount of contributions you can pay into super before additional tax applies. The ability of the ASF to accept QROPS Funds is subject to approval by the Trustee and may be subject to tax.

You should read the important information about ‘How super works’ before making a decision. Go to the section ‘How super works’ in the Member Guide available on our website aesf.com.au

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Risks of super

All investments carry risk and different investment strategies may carry different levels of risk, depending on the assets that make up the strategy. Assets with the highest long-term returns may also carry the highest level of short-term risk.

ASF offers a variety of investment options. Each option’s level of risk depends on the nature of its underlying investments and how it is structured to achieve its objective.

In general, the higher the expectedlong-term returns, the higher the level of short-term risk, and the higher the likelihood that returns will fluctuate from year to year – they may go up or they may go down – they may even be negative.

Significant risks associated with investing in ASF include inflation, interest rates, exchange rates, liquidity, derivatives, legislative, market failure and operational risks.

To ensure you choose the investment strategy that is right for you, you will need to consider:

--what level of return you want to achieve, and

--what level of risk you are comfortable with.

The appropriate level of risk for you will depend on your age, investment time frames, where other parts of your wealth are invested and your risk tolerance.

When considering your investment in super, it is important to understand that:

-- the value of investment options will go up and down

-- the level of returns will vary, and future returns may differ from past returns

-- returns are not guaranteed and you may lose some of your money

-- the money you save in super, including your contributions and returns, may not be enough to provide adequately for your retirement

-- laws affecting your super may change.

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How super is taxed

There are a number of ways that super is taxed. Tax on super is complex. The information provided is general in nature and we recommend that you seek advice from a registered tax agent to determine your personal obligations.

Providing that your Tax file number [TFN] is supplied:

-- Contributions into your super from your before tax pay are taxed at 15% [or 30% to the extent that your contributions cause your adjusted taxable income to exceed $300,000] which reduces to $250,000 from 1 July 2017. These are called concessional contributions.

-- Contributions into your super from your after-tax pay and transfers from overseas pension funds are generally not taxed but they are subject to limits. These are called non-concessional contributions.

-- Investment earnings in super are generally taxed at a maximum of 15%. Franking credits from investment in Australian companies and payments of fees are deducted from this tax.

-- Investment earnings in pension are tax-free.

-- Lump Sum Withdrawals from your super or pension account prior to age 60 may be subject to taxation. After the age of 60 all lump sum withdrawals are tax-free.

--Pension payments will be subject to tax prior to age 60 but the tax will be reduced by a tax offset of 15% between preservation age and age 60. Once you turn 60, pension payments are tax-free

The Trustee will deduct any applicable tax from your account balance or payments and pay it directly to the Australian Tax Office. You do not have any obligation to directly pay tax if you invest in the ASF.

Preservation age is 55 for those born before 1 July 1960 and will gradually increase to 60 depending on your date of birth. Refer to the Member Guide to find out your preservation age or go to www.ato.gov.au.

Please note, there is a different tax treatment applied to superannuation death benefits paid to your beneficiaries or deceased estate. Information is available at www.ato.gov.au Contribution caps [limits]

Warning: there will be taxation consequences if the contribution caps applicable to superannuation are exceeded.

Providing your tax file number [TFN] Warning: when you join ASF, you need provide your TFN.