You may not know it, but if your superannuation is with an industry fund you are helping Australia’s economy get back on its feet.
Industry super funds are helping the nation rebound from the dramatic impacts of COVID-19, which were highlighted when the federal budget revealed a deficit of $213.7 billion in 2020-21.
By investing in capital projects, industry super funds create higher tax receipts, lower pension payments and lower interest costs – all of which ultimately help reduce Australia’s deficit.
These projects include infrastructure and property construction, such as social housing, new airports, public transport and energy networks, all of which generate more tax revenue for the government.
The jobs created by these projects mean less people rely on income-support payments, such as the pension, and the increase in economic growth means interest rates stay low.
In 2018-19 industry funds spent $6.6 billion on capital investments, which equates to about 0.4 per cent of Australia’s gross domestic product.
Research by Industry Super Australia shows spending by industry super funds can boost the nation’s bottom line.
Thanks to higher capital expenditure on physical assets, the budget’s bottom line can improve by almost $2.5 billion.
pending on public infrastructure stimulates massive employment growth.
Over the next three years, ISA estimates that more than 200,000 new jobs could be created just through industry super funds investing in infrastructure projects.
This in turn reduces the number of people needing welfare support. And a weakened reliance on government income-support payments represents a saving of about $45 million each year.
In another step towards a stronger economy, the super guarantee is increasing, meaning the percentage of your wage employers must contribute to your retirement savings is going up.
This will see your retirement savings increase.
The super guarantee will rise from its current 9.5 per cent in staggered amounts to reach 12 per cent by 2025.
This change will help Australians rely less on the age pension and more on their own nest eggs, further reducing the impact on the budget.
By choosing an industry super fund you’re not only taking a step towards a solid retirement plan, but you’re strengthening Australia’s economy. And putting your weight behind our nation’s future is now more important than ever.
Stimulating our economy means a brighter future for our children and grandchildren.
Industry SuperFunds are investing in projects that strengthen our economy and your retirement savings. Find out more.
The assumptions used to estimate the potential impact of changes to the Superannuation Guarantee are, in our opinion, reasonable for the purposes of working out the estimates. The assumptions are based on objective evidence on long-term net returns, fees, relevant economic forecasts and analysis on wages, prices and productivity.
- This model works for accumulation funds only. It will not work for defined benefit funds.
- This model does not allow self-employed people to project their retirement balance
- Outcomes are based on contributions being made annually, at the mid-year point, on your fees being deducted annually and your investment returns being credited to your account annually
- We assume that your super is invested in a balanced option
- Superannuation Guarantee Contribution is currently 10% of ordinary time earnings and is presently legislated to incrementally increase to 12% by 2025
- The LISTO applies from 1 July 2017
- No tax is payable on fees
- We assume that you have provided your Tax File Number to your superannuation fund
- All amounts are in today's dollars, which means they are adjusted for inflation
- The assumed salary increase of 3% per annum has been adopted as an average figure based on a 37-year projection — that is, from the age of 30 to the retirement age of 67
- We assume that an annual inflation rate of 2%. In addition, a further annual increase of 1% is included to take into account the cost of meeting increases in community living standards. This means a total assumed inflation rate of 3% is allowed for. Employer and voluntary contributions, fees and the concessional contribution cap increase with inflation.
- We assume that you will satisfy the Work test at older ages and so are able to contribute to superannuation
- We assume that when you exceed the concessional contributions cap ($27,500 in 2021/22), you pay contributions tax according to your adjusted taxable income on any additional superannuation contributions
- Assumes retirement at the preservation age of 67
Your retirement outcome will be affected by many things including the amount of contributions you make, fees, investment returns and regulatory changes. Some factors that may affect your retirement outcomes may not have been taken into account.
Outcome is based on your contributions being made annually, at the mid-year point, on your fees being deducted annually and your investment returns being credited to your account annually.
This is a Model, not a Prediction
The tool is not intended to be relied upon for the purposes of making a financial decision. Consider a fund’s PDS and your objectives, financial situation and needs, which are not accounted for in this information before making an investment decision. You are responsible for your own investment decisions and should obtain specific, individual advice from a financial services licensee before making any financial decisions.
See www.industrysuper.com/assumptions for more details about modelling calculations and assumptions. Consider a fund’s Product Disclosure Statement (PDS) and your personal financial situation, needs or objectives, which are not accounted for in this information, before making an investment decision. This article was first published by The New Daily on 12 November 2020. The information referred to may change from the date of publication and care should be taken when relying on such information. Both The New Daily and Industry Super Australia are wholly owned subsidiaries of Industry Super Holdings.