Superannuation Highlights
SMSFs hold a quarter of Australia’s Superannuation Savings
The ATO recently shared some important facts about SMSFs. Here’s what they found:
- SMSFs are still a big deal: They make up a whopping 25% of all superannuation savings in Australia, totaling a massive $876 billion!
- Over the past five years, lots of new SMSFs were set up (about 24,000 each year), while others were closed down (around 13,800 each year). This means more people are getting involved in managing their own super.
- People love investing in different things through their SMSFs. The most popular choices are shares (like buying a piece of a company), followed by cash savings and term deposits (putting money in the bank), and unlisted trusts (investing in businesses that aren’t on the stock market).
- The amount of money each person has in their SMSF has gone up by 20% over the past five years, reaching an average of $780,000 per person. The total money in each SMSF has also gone up by 18%, reaching an average of $1.45 million.
- The typical age of people with SMSFs is 62, showing that many older Australians are using them. But interestingly, the average age of people starting new SMSFs is 46, meaning younger folks are getting in on the action too!
These numbers give us a clear picture of how SMSFs are growing in popularity and importance, and how they’re helping Australians plan for their futures. Understanding these trends is important for anyone thinking about managing their own superannuation.
Paying Super Guarantee with Wages
Starting from 1 July 2026, a significant change will occur regarding employers’ obligations concerning their employees’ Superannuation Guarantee (SG) liabilities. Employers will be mandated to pay these SG liabilities on the same day they disburse salary and wages to their employees.
This adjustment in the frequency of SG payment is anticipated to yield multiple benefits, primarily contributing to enhanced retirement outcomes for individuals. By ensuring that concessional contributions are injected into the system promptly, employees stand to gain from the compounded growth potential over time. Moreover, this shift promises to offer employees greater transparency and control over their SG contributions, fostering a deeper sense of financial empowerment and security as they plan for retirement.
The commencement date of 1 July 2026 has been carefully chosen to allow ample time for key stakeholders to adapt. The Australian Taxation Office (ATO), payroll service providers, and superannuation funds will utilize this period to implement necessary system changes to accommodate the new regulation seamlessly. Additionally, employers can refine their cash flow management practices in alignment with the updated requirements, ensuring a smooth transition for all parties involved.
Overall, this change represents a proactive step towards strengthening Australia’s retirement savings landscape, underscoring the government’s commitment to fostering a more robust and equitable superannuation system for future generations.