Contributions

Contributing to super – it is all about pacing yourself

By contributing small amounts along the way you can maximise your retirement savings. The longer your super is invested the more opportunity there is for it to grow and the more time you have to take advantage of compound investment returns and the tax concessions of super.

Compounding investment returns are returns earned on your investment returns. It happens when you reinvest investment returns rather than withdrawing and spending them. Basically, your savings accumulate faster.

Getting started well before you retire is likely to be far better than a last minute rush a few years before retirement and also means you can maximise the benefits of compounding investment returns.

Who can make or receive contributions?

If you are aged under 65, a super fund will accept contributions made by:

• you (e.g. after-tax personal contributions), or any other person on your behalf (e.g. spouse contributions, Government co-contributions), irrespective of the number of hours you work; and
• your employer (e.g. mandated employer contributions i.e. super guarantee contributions (SG) and contributions made under an industrial award or workplace agreement), voluntary employer contributions and salary sacrifice contributions), irrespective of the number of hours that you have worked.

If you aged 65 - 69, a super fund will accept contributions made by:

• you or any other person on your behalf - provided you have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days during the financial year in which the contribution is made; and
• your employer
• if those contributions are mandated employer contributions (refer above); or
• voluntary employer contributions or salary sacrifice contributions provided you have been gainfully employed for at least 40 hours in a period of not more than 30 consecutive days during the financial year in which the contribution is made.

If you aged 70 - 74, a super fund will accept contributions made by:

• you (but not by any other person on your behalf) - provided you meet the same work test rules as explained for those aged 65 -69.
• your employer - provided those contributions are mandated employer contributions) or you meet the same work test rules as for those aged 65 -69.

Your employer is no longer required under SG legislation to make Super Guarantee (SG) contributions on your behalf once you reach age 70 years.

If you aged 75 or more, a super fund will accept contributions made by:

• your employer - only if those contributions are required under an industrial award or workplace agreement.

If Maritime Super does not hold your TFN, we will also be unable to accept your non-concessional contributions (includes after-tax personal/member contributions, spouse contributions and co-contributions).

If you are aged less than 65, you and others on your behalf (but not including your employer) can generally only make non-concessional contributions in a financial year up to 3 times the non-concessional contributions cap (i.e. $150,000 x 3 = $450,000 for 2010/11). If you are aged 65 or more, you and anyone on your behalf (but not including your employer) can also only make contributions to Maritime Super in a financial year up to the non-concessional contributions cap (i.e. $150,000 for 2010/11). We will not accept contributions in excess of this cap amount.

If contributions are made outside the above rules, they will generally be refunded within 30 days to the contributor (subject to permitted adjustments).

You should also note that there are taxation consequences for the contributions made by you (or on your behalf) if Maritime Super does not hold your Tax File Number (TFN) or contributions are made above the contributions caps.

How much can be contributed without incurring additional tax?

There are limits (caps) on the amount of contributions that can be made without incurring unfavourable tax treatment. These caps generally apply to all contributions made by you or on your behalf in a year to all of your super funds. As Maritime Super is unaware of all your super circumstances, it is up to you to monitor the total amount of contributions that are made to super on your behalf  in a financial year.

If contributions are made in excess of the cap(s), the excess contributions will generally be taxed at least 46.5%. The tax on excess contributions is levied on the member. The member may be required to, or otherwise can choose to, use money from their super account to fund the tax liability.

There are different caps for concessional contributions and non-concessional contributions.

Concessional contributions

Concessional contributions are those contributions subject to tax (generally at a concessional rate) in the super fund.

Concessional contributions include:

• all employer contributions, including Super Guarantee (SG)
• salary sacrifice contributions
• personal/member contributions made by self-employed or substantially self-employed persons which are claimed as an income tax deduction; and
• directed termination payments (i.e. those specified in an existing employment contract or workplace agreement as at 9 May 2006 and are paid into super before 1 July 2012) in excess of the $1 million upper cap on the taxable component.

The concessional contribution cap is $25,000 for the 2009/10 and later financial years. This amount will be indexed in $5,000 increments from time to time.

A transitional arrangement applies to members aged 50 or more who are able make contributions of up to $50,000 for the 2010/11 and 2011/12 financial years. A member turning 50 during this period will be able to take advantage of the transitional arrangements from the time they turn 50. From 1 July 2012, the concessional contributions cap applying to all other members will apply (i.e. $25,000 a year). However, the Federal Government has announced in its 2010 Budget that from 1 July 2012, members who have a super account balance less than $500,000 will be able to receive concessional contributions up to $50,000 a year (indexed).

If you split contributions in favour of your spouse, the contributions will count towards your concessional contributions cap and not your spouse’s cap.

Any concessional contributions above the cap also count towards the non-concessional cap (explained below).

Defined benefit members

If you were a defined benefit member of Maritime Super (or the Teekay Shipping Superannuation Plan) on the 12 May 2009, ‘notional taxed contributions’ that you make in a year which are in excess of the concessional contributions cap are treated as though they are equal to this cap. Notional taxed contributions include any compulsory contributions deemed to have been made by your employer, any compulsory salary sacrifice contributions made by you, towards your defined benefit during the year.

However, any other concessional contributions (e.g. voluntary salary sacrifice, voluntary employer) made towards a defined benefit member’s accumulation benefit will be subject to the cap and the member will be liable for the excess contributions tax on those contributions. If you are a defined benefit member thinking of making voluntary salary sacrifice contributions to Maritime Super, you will first need to know the amount of your notional taxed contributions. The Fund’s Actuary advises how notional taxed contributions are calculated using a formula specified in super legislation to determine the amount of these contributions. Contact Member Services if you require the value of your notional taxed contributions for the year, so you can determine the amount of any other concessional contributions (that count towards your accumulation benefit) that you can make without exceeding this cap.

Non-concessional contributions

Non-concessional contributions are those contributions which are generally not subject to tax in the super fund.

Non-concessional contributions include:

• personal contributions not claimed as tax deduction
• spouse contributions (in the receiving member’s account); and
• excess concessional contributions (above the concessional contributions cap).

Non-concessional contributions do not include:

• the Government co-contribution
• contributions which result from the disposal of qualifying small business assets (up to the lifetime capital gains tax cap of $1.155 million for 2010/11 and indexed annually)
• settlement proceeds from an injury resulting in permanent disability
• contributions received as part of a Family Law settlement or contributions splitting; and
• a rollover or transfer of a super benefit between complying Australian super funds.

If your contribution results from the disposal of qualifying small business assets or a personal injury payment you will need to advise us (using the appropriate ATO form) when contributing to Martime Super.

The non-concessional contributions cap is six times the concessional contributions cap and for the 2010/11 financial year is $150,000.

However, you can bring forward two years’ worth of contributions and contribute three times the current year cap over any three-year period before your 65th birthday. For example, you can contribute $450,000 in 2010/11 if you make no further non-concessional contributions until 1 July 2013.

Ways to contribute and grow your super

For many people the compulsory contributions made by their employer may not be enough. You might want to increase the amount you invest in super by making your own contributions and effectively growing your super.

You can make contributions by:

• regular deductions from your before-tax or after-tax salary or wages via a payroll deduction
• one-off or regular after-tax lump sum payments made directly to Maritime Super, this might include the proceeds from the sale of a property or from shares
• rolling in your account balance or a specified amount from another super fund; and/or
• rolling in certain employer termination payments called Directed Termination Payments (DTPs) – that is, those specified in an employment contract or workplace agreement as at 9 May 2006 and paid into a super fund before 1 July 2012.

By making after-tax personal contributions to super, you may also be eligible for the Government co-contribution.

By rolling in your super from other super funds and reducing the number of super funds that you have, you can reduce the amount of fees and charges you pay, simplify your paperwork and make it easier to manage your super. Having only one super account means you will end up only paying one set of fees and charges.

The importance of providing your Tax File Number (TFN)

Not prroviding your TFN to your super fund could make a big difference to your retirement savings over time.

If we don't have your Tax File Number (TFN) recorded:

• we will not be able to accept personal after-tax contributions, spouse contributions and the Government co-contribution (if any) to your Maritime Super account
• employer (including salary sacrifice) contributions made to your Maritime Super account may be subject to tax at the top marginal rate (45% for 2010/11) plus 1.5%. You may be able to apply to the Trustee for a refund of any No-TFN tax withheld if you supply your TFN to the Trustee within three (3) financial years after the contribution is made; and
• you may pay more tax on your benefits than is necessary.

By providing your TFN to Maritime Super it will also be easier to trace different super accounts in your name so that you receive all your super benefits when you retire.

Government co-contribution

If you earn less than $61,920 in 2010/11 and 2011/12, you may be eligible for a Government co-contribution of up to $1.00 for every $1 in after-tax contributions you contribute to your super (up to $1,000). This means the Government may match your eligible contribution 100% with a co-contribution.

You may be eligible for a maximum co-contribution of $1,000 if your income is $31,920 pa or less for 2010/11 and 2011/12 and you contribute $1,000 or more in after-tax personal contributions to super for that year. For those on incomes over $31,920 pa for 2010/11 and 2011/12, the co-contribution reduces by 3.333 cents for every dollar of income over this threshold amount. There is no co-contribution payable if you earn $61,920 pa or more. 'Income', for this purpose, means your assessable income plus any reportable fringe benefits, plus salary sacrifice contributions made to super minus business income deductions. Please note, salary sacrifice contributions made to another super fund which you cannot influence (for example, where you cannot elect to make your contributions on a before or after-tax basis or influence the amount of the contribution), may not be included in the definition of ‘income’.

The rate at which the Government will match after-tax personal contributions for 2010/11 and later financial years is summarised in the table below:

Financial year	Matching rate*	Maximum co-contribution (for each financial year)
2009/10 and later	100%	$1,000
2012/13 - 2013/14**	125%**	$1,250**
2014/15 and later**	150%**	$1,500**

*	The matching rate is the rate the Government will match your after-tax personal contributions (subject to reductions based on income). For example, a 100% matching rate means that for every after-tax $1 you contribute to super (up to $1,000) the Government will match with a co-contribution of up to $1.
**	The Federal Government announced in its 2010 Budget that the Matching rate and Maximum co-contribution would be retained at 100% and $1,000 (respectively) indefinitely.

To find out what you may be entitled to, use the co-contribution calculator on the ATO website.

Co-contributions are tax-free on deposit and withdrawal and are not subject to the non-concessional contributions cap. However, co-contributions must generally be preserved within super until permanent retirement on or after reaching preservation age.

Who is eligible?

To be eligible for a co-contribution you must:

• have total income less than $61,920 per annum (2010/11 and 2011/12)
• make personal after-tax contribution(s) for yourself and not claim a tax deduction for the contribution(s)
• lodge an income tax return for the year
• have provided a TFN to your super fund
• be under 71 years of age at the end of the financial year in which the contribution is made
• earn 10% or more of your total income as an employee or from carrying on a business (or a combination of both); and
• not hold a temporary visa at any time during the financial year (unless you are a New Zealand citizen or the holder of a prescribed visa).

How will the super co-contribution be paid?

Your super co-contribution will be calculated after you have lodged your tax return and the Australian Taxation Office (ATO) has received contribution information from Maritime Super (not due until 31 October following financial year end). The ATO will use this information to work out whether you are eligible.

The super co-contribution will be automatically calculated and should be deposited directly into your Maritime Super account (unless you have commenced a pension, in which case it can generally be paid to you directly, or have multiple super accounts, in which case you can nominate your preferred fund by contacting the ATO).

Once the co-contribution has been deposited into your Maritime Super account, the ATO will notify you that a co-contribution has been made. Co-contributions are also identified on your Annual Member Statement.

Find out how to make a personal contribution into your Maritime Super account.

Spouse contributions

You can make contributions to your spouse’s (including an opposite or same sex de facto partner's) account and your spouse can make contributions to your account. Spouse contributions can be made on behalf of your spouse in the form of regular after-tax payroll deductions or lump sums. In either case, you must quote the Member Number of the spouse who is to receive the contribution.

If you make a contribution to your spouse's account and your spouse's income does not exceed $13,800, you may be entitled to a tax off-set of up to $540. You should note that your spouse's 'income' also includes salary sacrifice contributions that he/she makes to super where he or she can influence those contributions and total reportable fringe benefits. A spouse can influence his/her salary sacrifice contributions if he/she can influence whether those contributions are made before or after-tax or the size of those contributions.

However, if your spouse’s income is $10,800 or less, the tax-offset is 18% and is available on contributions of up to $3,000. It reduces by 18c for every dollar earned over $10,800 so that the tax-offset finally cuts out altogether at $13,800.

Learn more about Spouse Accounts (Stevedores division) and Spouse Accounts (Maritime Super division).

Contribution splitting

Maritime Super allows members to split their super contributions with their spouse (including an opposite or same-sex de facto partner).

You can split up to 85% of the following contributions in favour of your spouse’s super account:

• salary sacrifice contributions
• employer contributions (including SG and award contributions); and
• after-tax personal/member contributions you claim as a tax deduction (applies to self-employed and substantially self-employed members only).

You cannot split:

• after-tax personal contributions not claimed as a tax deduction
• spouse contributions
• Government co-contributions
• a roll over of super benefit(s)
• contributions made by employers and members to fund members' defined benefits; and
• a Directed Termination Payment (i.e. employer termination payments specified in an existing employment contract or workplace agreement as at 9 May 2006 and paid into a super fund before 1 July 2012).

Contributions can generally only be split in the financial year following the contribution being made and only once for that year. However, if you close your account you can split contributions in favour of your spouse at that time. The amount that can be split in a financial year cannot exceed the concessional contributions cap. If you are interested in splitting contributions with your spouse, we suggest you seek financial advice to determine whether it is appropriate for your situation. To arrange an appointment with a financial planner, contact Member Services on 1800 757 607.

How to make contributions and rollover benefits

New members

If you wish to become a Maritime Super member, contact Member Services to discuss your options.

Existing members

If you want to make contributions, it's important to discuss your options with your employer or payroll office.

The following table details how you can make contributions and rollover benefits into your Maritime Super account.

	Stevedores division members	Seafarers or  Maritime Super division members
Voluntary after-tax payroll deduction	Complete a Voluntary Contributions form and give it to your employer, otherwise speak with your employer to make arrangements.	Complete a Voluntary Contributions form and give it to your employer, otherwise speak with your employer to make arrangements.
Lump sum	You have two options: Send a cheque made payable to Maritime Super with a Deposit form or a signed letter that clearly states the following: your Member Number your name and address your contact phone number; and the contribution type Deposit the amount directly into Maritime Super’s bank account. Make sure you reference the deposit with your Member Number, name and type of contribution (whether you are using online banking facilities or making your contribution directly at a branch). Bank Commonwealth Bank of Australia Account Name Maritime Super BSB 062 000 Account Number 1006 4581 Reference Your Member Number, name and the contribution type Once you have done this, fax or post the Deposit form to Maritime Super.	You have two options: Send a cheque made payable to Maritime Super with a Deposit form or a signed letter that clearly states the following: your Member Number your name and address your contact phone number; and the contribution type Deposit the amount directly into Maritime Super's bank account, making sure you reference the deposit with your Member Number, name and type of contribution (including whether you are using online banking facilities or making your contribution directly at a branch). Bank National Australia Bank Account Name Maritime Super BSB 083 001 Account Number 57 954 3660 Reference Your Member Number, name and the contribution type Once you have done this, fax or post the Deposit form to Maritime Super.
Roll over from another fund	Find out the member details for your other fund(s) and complete the Rollover to Maritime Super form. Before rolling over, check whether any exit fees may apply to your other fund and whether you will lose any insured benefits if you transfer your benefits out. You should consider whether your insurance needs will be met if this occurs.	Find out the member details for your other fund(s) and complete the Rollover to Maritime Super form. Before rolling over, check whether any exit fees may apply to your other fund and whether you will lose any insured benefits if you transfer your benefits out. You should consider whether your insurance needs will be met if this occurs.
Spouse contributions	To set up a Spouse Account, call Member Services on 1800 757 607 for a copy of the Retained Benefits and Spouse Accounts Member Guide. To make a contribution, follow the instructions for after-tax payroll deductions or lump sum amounts above (as appropriate). Make sure that the Member Number and full name of the spouse or partner to receive the contribution is quoted with the contribution.	To set up a Spouse Account, call Member Services on 1800 757 607 for a copy of the Spouse Account Member Guide. To make a contribution, follow the instructions for after-tax payroll deductions or lump sum amounts above (as appropriate). Make sure that the Member Number and full name of the spouse or partner to receive the contribution is quoted with the contribution.