AUSTRALIA'S largest accounting body, CPA Australia, is urging workers to check how next month’s increase to the Superannuation Guarantee will affect them. The change means the minimum contribution that employers are required to make to their employees’ superannuation funds will rise from 11.5 per cent to 12 per cent from July 1. CPA Australia’s Superannuation Lead, Richard Webb, said the increase could make a substantial difference to retirement savings in the long run. “For a young person on $60,000 a year, the increase translates to an extra $300 in their super account every 12 months. "But depending on investments and fees, the cumulative effect of that increase could ultimately be worth thousands by the time they retire,” he said. While the increase in the Superannuation Guarantee will have a positive long-term benefit to retirement savings, Mr Webb reminds workers to check if their employer is making the extra contribution, or whether it comes out of their total remuneration package. “If your employment contract includes a total remuneration package including super, this could mean less take-home pay at the end of the month,” he said. “However, for those on award or enterprise agreements, your pay agreement is more likely to be a salary, which means the change will not affect your take-home pay. “It’s a good idea to check with your employer to see how they view the changes and what it means for you. "Otherwise, you might get a shock if your take-home pay is a little less than expected.” July 1 also marks the date when superannuation payments will now be included in the government’s Parental Leave Pay scheme. Mr Webb says now is the time for Aussies to take charge of their savings and ensure they are on track for a comfortable retirement. “There are no more legislated increases to the Superannuation Guarantee, so it’s up to individuals to take control of their super and make sure they are getting the most from their money,” he said. “This includes making sure the investment and insurance options within the fund are appropriate. “It’s important you put time aside to look at your superannuation. "For example, if you have more than one fund, consider whether it is appropriate to consolidate them into one account, and use a good online calculator, such as the Moneysmart website’s tool, to estimate how your current balance will accumulate by the time you reach retirement age. “It’s never too late to look into growing your retirement savings, including making additional contributions to your fund before the end of the financial year. "Your financial adviser will be able to help you with these decisions.” Next month's increase in the Superannuation Guarantee marks the end of a long-drawn-out process of incremental increases to the minimum super contribution requirement from nine per cent to 12 per cent after it was legislated back in 2012. “It’s good to have finally reached the point where Australians will receive this much-needed increase in minimum superannuation contributions - but it should not have taken this long,” Mr Webb said.
