Super and product changes

Super Informed
25 Aug 2021
3 min read

Super

Superannuation Guarantee (SG) rate increase

On 1 July 2021, the SG rate increased from 9.5% to 10% and will continue to increase each year until it reaches 12% on 1 July 2025, in line with government legislation under the Superannuation Guarantee (Administration) Act 1992.

The SG is generally the minimum amount an employer must contribute to an employee’s super. These contributions help build your retirement savings and supplement the Age Pension. Visit the ATO website to learn more. 

New contribution thresholds

From 1 July 2021, the amount members can generally contribute to super (subject to eligibility) before further tax may be payable, has increased.

  • The concessional (before-tax) contributions cap is now $27,500, up from $25,000.
  • The non-concessional (after-tax) contributions cap is now $110,000, up from $100,000.

Additional restrictions apply regarding contributions, including age limits and limits relating to a member’s super balance. Visit the ATO website to learn more.

Removal of the excess concessional contributions charge

From 1 July 2021, all contributions above the concessional contributions cap will no longer attract the excess concessional contributions charge. 

If you’re impacted, you’ll receive a determination letter from the ATO. Contributions above the cap will still be taxed at your marginal tax rate. A 15% tax offset, to account for the contributions tax already paid to the super fund, continues to apply. 

Re-contribution of COVID-19 early release super amounts

If you received a COVID-19 early release of super amount, you’ll be able to re-contribute up to the amount you received, without the contribution counting towards your non-concessional cap. These contributions:

  • can be made between 1 July 2021 and 30 June 2030
  • can’t exceed the total amount of super accessed under the COVID-19 early release scheme, and
  • can’t be claimed as a personal super deduction.

The ATO is still working through the details of this process and we’ll provide more information on our website in the coming weeks. 

Stapling 

From 1 November 2021, if a new employee doesn’t nominate a super fund, their employer will generally be required to determine if they have a stapled (single default) fund and then pay their SG contributions to that fund. Certain exceptions apply for Defined Benefit Division (DBD) members. 

Under stapling, your existing super fund account is ‘stapled’ to you, as you move from one job to the next. It’s intended to avoid the creation of multiple super accounts that could reduce your retirement savings.

Existing employees (who commence before 1 November 2021) are not directly impacted by stapling.

If you start a new role and are provided a superannuation choice form, you can nominate UniSuper as your default fund, so your employer sends contributions to your account with us.

Defined Benefit Division opt-in

For many years, the DBD has been our default product for permanent employees of a participating UniSuper employer.

From 1 November 2021, however, our default product for these employees will become Accumulation 1, and membership of the DBD will occur on an opt-in basis. 

To be eligible to join the DBD, you must: 

  • have commenced employment on or after 1 November 2021
  • be under age 65 on the date you commence in the DBD
  • be employed in a role your employer agrees can participate in the DBD, for less than 24 months 
  • have never previously been an Accumulation 2 member, and
  • have not previously commenced contributing to the DBD on or after 1 November 2021.  

The DBD provides a super benefit that accrues based on a formula and isn’t directly affected by the performance of investment markets. The DBD and Accumulation 2 Product Disclosure Statement (PDS) outlines how the DBD works and will be updated with more detail on this change after 1 November 2021. 

Retirement

Transfer balance cap changes

From 1 July 2021, the total amount of super a member can use to start a retirement phase pension (like our retirement phase Flexi Pension), called the general transfer balance cap, increased from $1.6 million to $1.7 million. 

Everyone has a different (personal) transfer balance cap, depending on their circumstances. For example, if you start a retirement phase pension for the first time during the 2021-22 financial year, your personal transfer balance cap will be $1.7 million. 

All retirement phase pension accounts and death benefit income streams (excluding child death benefit income streams, where a separate cap applies) count towards your personal transfer balance cap, including any similar accounts you hold elsewhere. Learn more

Minimum pension drawdown changes

In response to the financial impacts of COVID-19, the government temporarily reduced the minimum pension drawdown rates by 50% for the 2019-20 and 2020-21 financial years.
On 29 May 2021, the government announced an extension of this temporary measure. The reduced minimum drawdown rates will continue to apply for Flexi Pension and Term Allocated Pension (TAP) members for the 2021-22 financial year, ending on 30 June 2022.

Insurance

Occupation ratings

From 3 July 2021, occupation ratings are now included when calculating insurance cover costs for Personal Accounts.

Occupation ratings enable insurers to more accurately reflect the insurance risk associated with individuals (based on their type of work) and help us charge more fairly for insurance cover.

To review your cover and check you’re only paying for the cover you really need, the Insurance calculator is a good place to start. You can view your existing insurance cover, your premiums and other super information, by referring to your most recent statement or logging in to your account. Learn more

Improving our complaints handling process

We’re always looking for ways to make your experience with us easier. That’s why we’re working on improving the process in which we capture, resolve and report on your complaints. 

This aligns with the standards and requirements set out in ASIC Regulatory Guide 271 Internal dispute resolution (RG271) and will include updates to improving the complaint information on our website and improving the complaint form. We’re aiming to have these changes live on our website by 5 October 2021. 

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