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Our education videos cover a range of topics with expert guidance on how to make the most of your super. Each video runs for around 20 minutes and can be watched whenever it suits you. Check back again soon for more on demand videos.

Super basics - saving for your future

Sometimes trying to understand super can be confusing. We’ll break it down in simple terms so you can feel confident knowing how to make the most out of yours.

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Super basics - saving for your future

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Hello and welcome to AustralianSuper's Super Basics - Saving for your future presentation.

A lot of statements we get from members when they're almost at retirement or at retirement is I wish I had have started sooner. So, we're hoping that today you take one piece of information that you weren't aware of or an action point that you can take from the information we provide to you in today's session that will help you to achieve a better retirement outcome.

So, in today's session, we'll be covering off on the basics of super.

Now my name is Bec Barmer and I'm an education manager here at AustralianSuper and I've been in the financial services industry for the last 20 years. So, my job is to help you understand superannuation better, so that you're armed with the tools and the knowledge to help you achieve a better retirement outcome.

I would like to acknowledge the traditional custodians of the land on which we work and pay my respect to Elders past, present and emerging, and extend that respect to all Aboriginal and Torres Strait Islander peoples. Now I'm talking on the land of the Larrakia people today, and I would like to say Walawan, which is good morning in native Larrakia language. I understand it might have just gone lunchtime for some of you in other parts of Australia, but we are still morning here in the Territory.

Now, before we get into the presentation, I would like to note that today's session is general advice only. So, what that means is it doesn't take into account your own personal circumstance, what your own goals are, and your needs. So, if there is some information that we cover off on today that you feel might be relevant to you, I'd encourage you to jump onto our website and have a look at the product disclosure statements and have a read of our financial services guide. And if you feel like you are still looking for further tools and advice, at the end of the presentation, I'll be directing you where you can go for that.

In today's session, we'll be covering off on four key areas and then also where to go for help and advice. And what we'll be covering off on is, what is super? So, let's talk about what it is and how it works. We'll also talk about when you can access your superannuation. It can be a little bit of confusion as to when age pension age is, where you may be eligible to receive an income from Services Australia, as opposed to when you can actually access your own superannuation that you have accumulated throughout your working life. We'll also talk about how superannuation works and have a look at some of the types of contributions that can be made and contribution caps. And we'll also talk about the ways that you can take control of your superannuation. And then finally, where you can go for help and advice.

So, let's start with, what is superannuation?

Well, superannuation is money that's set aside for you whilst you're working to provide you with either a lump sum or an income stream for your retirement. So, to fund your retirement. Now as it stands, superannuation guarantee or your employer contributions is paid at a rate of 11.5%. So that increased on the 1st of July this year, it was 11% that your employer paid in. But as of the 1st of July this year, you received a little bit of a pay rise into your superannuation and it's now 11.5%. Next year on the 1st of July 25, that superannuation guarantee contribution rate will go up to 12%. So that's what's paid into your superannuation from your employer to accumulate through your working life to fund your retirement.

Now you are able to also pay into superannuation on top of that and we will talk about what those contributions can look like and what the cap limits are for those. You can also choose where your money is invested within your superannuation account. Now super is a long-term investment. So, where your money is invested in your superannuation is important because with the power of compounding returns, those that income that you receive. So, the returns on where your money is invested helps to create the snowball effect in your superannuation. Where that will continue to grow with employer contributions and potentially other contributions that you might make. To snowball and create a larger account balance to fund your retirement.

Now there is taxation within superannuation, but it is a concessionally taxed environment. Now within superannuation, when you're in the accumulation phase, so you're accumulating wealth for your retirement, your investment earnings and your superannuation is taxed at a rate of 15%. So, if you think about what your rate of tax is that you pay on the income that you earn outside of superannuation, if it's anything more than 15%, well then you can see where that concessionally tax environment is within superannuation. Now it really does depend on what level of income you're earning outside of superannuation as to what your marginal tax rate would be. So, and then you can compare that to what that concessionally rate of tax is within super being 15% and that will help determine what tax savings you might be eligible for, for any contributions to super.

Now you can find some more information on what is superannuation on our website at australiansuper.com/superannuation/what-is-super.

Now, when can you access your super?

This is, as I mentioned earlier can be a little bit confusing as to when you can access your superannuation as opposed to when you might be able to apply or claim for the government age pension through Services Australia. Now when you can access your superannuation is based on conditions of release and one of those is called preservation age, which is currently age 60. So, you can access your superannuation once you've met preservation age, so age 60 and you've met one of those other key bullet points underneath there. So, you've either you've stopped working permanently or maybe you've stopped working for an employer after you turned 60. So maybe you had two jobs and maybe you ceased one of those employment arrangements. Well, that would classify that condition of release.

So, preservation age and accessing your superannuation. If you haven't completely stopped working or stopped working for an employer after you turn 60, you may be eligible to have a look at whether a transition to retirement strategy might be suitable for you. Once you've met that preservation age where you might not be able to access to all of your super. But there are some helpful ways that you may be able to use a transition to retirement strategy in those years after you turn 60 until you either reach 65 when you can access all of your super, or until you stop working. There are some limitations on a transition to retirement strategy. And if it is something that is of interest to you, we do have a really good webinar that discusses all of the ins and outs of understanding transition to retirement.

But if we go back to when you can access your super. So, we've talked about those factors between the ages of 60 and 64 where if you've met that preservation age and you've ticked off one of those bullet points, well, once you reach age 65, whether you're working or not, you can access your superannuation. Now keep in mind as well that age 60 is a magic number in the world of superannuation because once you reach age 60, any drawdowns, so any withdrawals or drawdowns from superannuation are tax free.

Now I will cover off on some of the other conditions of release.

So, accessing super early.

So, there are some other ways that you may be able to access some of your superannuation, but these are really limited and special circumstances that you may be able to access your superannuation under.

So, one of those is the first Home Saver Super Scheme.

And so, what happens with that scheme is it allows first home buyers to make contributions into superannuation where remembering there could be those tax concessions to allow additional savings in, in terms of saving on tax. To save into super, to save for a deposit on a home.

Now there are some rules around that, in terms of, it must be for that person's first home and utilising those contributions that have been made.

But that is one possible scenario.

Then other circumstances might be severe financial hardship, terminal illness or permanent incapacity, and then finally permanently leaving Australia, would also be one of those conditions of release.

So, you can find more information on those at australiansuper.com/accesssuper

Now, how does super work?

Well, if you think of superannuation like a bank account, that money goes in and money goes out.

So, what goes into superannuation is employer contributions or maybe their contributions that you make as well, or if you're just making those contributions, depending on what your employment position is.

Also, money going in, that's accumulating, would be any of the positive investment returns.

So, your money would be invested within your superannuation account of your choice.

You'd have an investment menu with available investment options that you can select. So, depending on the performance of that particular investment option that you're in or options depending on your position.

If returns are positive, well then that also helps to accumulate your superannuation.

Now what comes out of super things such as your, your fees.

So, within a superannuation account, there are administration fees.

So that's the cost to do all of the administrative type duties that the fund has to perform and then there would be any taxes.

So, we spoke about the 15% tax within super and tax on contributions as well.

So that would come out of the account. Any costs.

So, there might be investment manager fees as well that are associated depending on where your money is invested, there would be investment manager fees that are payable for that particular portfolio, also insurance costs.

So, if you have insurance cover through super, and we'll talk about insurance a little bit later in the presentation, but any of the premiums or cost for that insurance cover through super that you might hold, that would also be money out of your superannuation account.

And then of course, if investment returns are negative, that would also come out of that superannuation account.

Now contributions. So, let's talk about how you can get money into superannuation.

And there's two main contribution cap types that that you're eligible to use.

And the first one is a concessional contribution and that is before tax contributions.

And there is a cap limit that I'll refer to on the next slide to show you what those cap limits are.

And I'll break down what types of contributions fit into that concessional contribution cap band.

Then you also have after tax or non-concessional contributions, and you have another cap limit for that as well.

So those after-tax contributions is that you've, you've received your pay and you've already paid tax on that money.

Now you're deciding to pay money into superannuation.

So that would be an after-tax contribution because you've already paid tax on that money.

So, we'll have a look on the next page in terms of what those cap limits are.

So, you can see here on the left-hand side we have the before tax or concessional contributions and then on the right we've got the after tax or non-concessional.

So, if we look at concessional contributions, that's made up of your employer contributions.

So, your superannuation guarantee that's that rate of 11.5% that your employer would pay into your super on your salary and then any salary sacrifice arrangement that you have made with yourself and your employer.

So, a salary sacrifice arrangement is that arrangement that you have made with the payroll department or your employer to say I would like to sacrifice X amount of money from my pay before tax into my superannuation.

And there can be some, again, depending on what rate of tax you pay on your income, there could be some tax concessions there in terms of saving tax because you're paying that money into super before you pay tax on it.

And the savings come from the fact that there is a 15% contribution tax on these before tax contributions.

If you think about what that might be outside of superannuation, so tax on income, there can be a saving there.

So, let's just give a quick example of you had $100 and you received that $100, let's say that your tax rate is $0.30 in the dollar, so 30% tax rate.

So, you have $100 and if you receive that money outside of superannuation, $30.00 of that would go to the tax department and you have $70.00 in your hand.

Well, if you had that same $100 and you were to contribute it to superannuation because there's a 15% tax on contributions as opposed to that 30% tax that you would have paid on outside, well, you actually have $85 of that 100 going into your super.

So, $15 of that goes to the tax department.

So, with those tax savings, that's where superannuation can accumulate more. And then also tax-deductible contributions.

So that would be that you decide to put in an amount of money into your superannuation and then claim a tax deduction on it.

Now they all form part of the concessional contribution cap and that is currently a cap limit of $30,000 per year.

And that cap limit has just gone up on the 1st of July this year.

So, all of those types of contributions would fall into that concessional contribution cap limit.

And then on the right-hand side, we have our non-concessional after-tax contributions.

And you can see there that the cap limit is $120,000 per year, so a lot higher than the concessional.

And that would form any of the voluntary I'd like to pay into my superannuation.

I've already paid tax on that money, and I would now like to pay into my superannuation.

So that would form part of your non-concessional after-tax contributions.

Now if you're not quite sure where to keep track of your contributions that have gone into your super, myGov is a really good place to keep track of that because it'll be for you specifically and it will show you exactly how much contributions have been paid into super under those cap limits.

And then there is also something called a carry forward of concessional contributions.

It'll keep track of that as well.

And that is where if you haven't used all of your cap limit over the last five years, as long as your super is under $500,000, you might be eligible to then carry forward those unused concessional contributions into future years.

So, you'd find all of that information on your myGov account, which would be specific to you.

So, a really good place to have a look at if you haven't already.

And we just want to demonstrate on this shot on this slide about how compounding interest works really.

So, I spoke earlier about the snowball effect of accumulating money throughout your working life in terms of adding into superannuation and then investment returns, you know, snowballing and creating that bigger pool of wealth for your retirement.

Now what this demonstrates is just an indication that if somebody was to add in $20 per week for a 10-year period.

This is how much their superannuation could accumulate by doing that for that 10-year period.

And what it's also demonstrating is that the sooner that this occurs, the more money there is potentially able to grow through superannuation to fund retirement.

So, we look on the far-left hand side, you can see there that there's the $29,000 and it's the bigger, bigger bag of money.

So, you can see there that's the 10-year period from age 20 to 30.

So, this person at age 20 said I'm going to put in $20 a week into my superannuation and that superannuation balance has grown by $29,000.

Now that's a 10-year period.

So, you can imagine if that person kept that up for their entire working life, what that could potentially do to their final retirement balance it would be very beneficial for them.

Now you can see there on the sliding scale, if somebody started that same $20 a week for 10 years at age 30 to 40, their super balance will grow by $22,000 and so on.

And what it's trying to demonstrate is the sooner that you start, the better.

And it doesn't matter how much, but every little bit counts into superannuation because it's the power of compounding interest.

So, the bigger that that pool of wealth is, the more that that snowball can potentially grow and provide you with more flexibility throughout your retirement.

Now I referred to investment options within super.

So, you have choices to where your money's invested within Super and there is a range of options available.

And it really comes down to how you feel about risk versus return because there are high growth options and there are conservative options and everything in between.

So, what is a really good place to start is understanding how you feel about risk versus return.

How would I feel if the market dropped tomorrow by 20%?

You know, would I be, would I freak out and think, oh my gosh, I just want to sell everything?

Or would you say, you know what, I know that supers a long-term investment.

I've got time on my side, and I know that at some point that will grow again.

That's a good starting point to understand how you really feel about the risk, because the higher risk that you take, the higher the potential return, but also the more potential there is for that money to, to have a downturn or a greater downturn.

And on the conservative side, you know, maybe you're someone who doesn't like taking risks and you don't feel like you need to generate those returns for that, that retirement pool that you're after to fund your lifestyle.

And maybe you'd like to just take a lower level of risk, you know, knowing that there's lower potential return, but you know, in the downturns of the market, there's, you know, your, your portfolio is not going to drop by as much as if you were in, you know, a high risk, for example.

So, it's getting a really good understanding of one, what's your time horizon?

How long have you got left before you are going to retire or need to access your money?

And then thinking about how you feel about the risk side of it as well.

You can find more information on our investment options at australiansuper.com/investmentguide

Now just to demonstrate how money is invested, and this is using the balanced option, which is our default portfolio.

So, if you haven't made an investment choice, you'd be invested in our balanced portfolio.

So, you can see here, this is the strategic asset allocation from the 1st of July this year and it's showing that within the balanced portfolio, there's exposure to Australian shares, international shares, private equity, infrastructure, property, credit, fixed interest, cash and, and that's makes up the portfolio.

Now the balance portfolio is roughly about a 70% split to your growth assets.

So that's your Australian shares, international shares.

And then that range can vary depending on what the investment managers see that outlook to be.

So, you can see there at the moment the Australian shares at the exposure is 23.85% and to international shares it's 30.65%. and you can see there's a lower exposure to those defensive assets, but you can see that exposure level there.

So, it's just showing you that within you might see balanced portfolio on your statement, but underneath that there is exposure to a range of asset classes and investment managers that the investment team are looking out for.

And they are actively managing that to determine what they see the best outlook for that portfolio is.

And that goes for all of the other portfolios that are available.

But this just demonstrates what that might look like under the hood.

So, performance through market events.

So, this just shows $100,000.

It's invested for 20 years and that starts from June 2004 all the way up to June this year, 24.

And what it's demonstrating is this is the balanced option.

So, an example of that.

So, if $100,000 was invested 20 years ago, even though we've had market downturns.

So, if you think back to the global financial crisis around 2008 and then more recently COVID, well, markets were impacted, financial markets were impacted.

So, there were some downturns, but you can see that that $100,000 has still grown over 20 years to 453.

Or just under $454,000 even with those market downturns.

So, this is just demonstrating that time and when you need to access your money is important when thinking about investment options, but also the power of growth and time.

We'll just discuss here some examples of what the fees are within an AustralianSuper account.

And I touched on the fact that within superannuation, any superannuation account, you would have administration fees and also investment fees depending on where your money's invested and maybe some other costs associated with that as well.

But this gives the investment fees there in the in the top bar, it shows that depending on where your money is invested in investment options that could range from 0.07% to 0.55% depending on which investment option you're invested in.

And you can see there specifically for the balanced option, which is the default option, the investment costs are 0.52% per annum.

Then you can see the next line down there is transaction costs.

So, this is demonstrating the balanced portfolio again, it's 0.05% per annum.

And then you'll see the next line there showing the administration cost.

So that's the dollar a week flat fee plus .10% per year of the account balance.

So, you'll find all of the fees in the product disclosure statements.

If you have another investment option outside of the balanced fund, you'll also find that specifically in the product disclosure statement.

But this is just demonstrating what the fees are within an AustralianSuper balanced portfolio more specifically.

So, consolidating super, if you have more than one super account, it's a good idea to do some comparisons, excuse me, to understand whether consolidating super is appropriate for you. Things to consider what are the costs, what are the fees that you're paying in your account?

What are the available options, investment options, what are the potential loss benefits of consolidating any cover?

And most importantly, thinking about whether you hold any insurance cover under your account and then you can do on, on our website, there's a really good tool to compare so you can compare funds and it would compare those types of things for you.

Now, if you are consolidating super, you can do that through your myGov account and it's a good place to check as well because it will detail any potential lost super.

But also, if you're not sure where your superannuation is, myGov will be that source of truth to list where that superannuation might be held.

If you are considering consolidating and you're not quite sure and you want some advice, I'll direct you to our 1300 number at the end of the presentation and you can call and, and request some advice, but it's really important.

The main thing is to just make sure you're not losing any key benefits or features when you're rolling over funds and most importantly in insurance cover.

Now onto insurance.

There are three types of insurance cover available through super, and that's death cover, payable a lump sum on death or terminal illness.

And then you've got total and permanent disablement cover or TPD for short, that's also a lump sum payment if you're never able to work again.

And the key here is in any occupation, and then you also have income protection, or you might have heard income replacement, where generally it's a 75% of your income paid monthly after you've met a waiting period.

So, you've been off work because you're sick or injured for, for that waiting period time.

You then make a claim.

If the claims assessed and completed and they say yes, you're eligible for a claim, then you would be paid a monthly benefit until you are able to return to work or until you've met what's called the benefit period.

So, a really important thing to check is do you have any insurance cover?

AustralianSuper does issue default insurance cover which is age based if a members over 25 and their balance is more than $6000.

But it's a really good place to start by just understanding if you have insurance cover, how much do you have?

And or if you're not sure if you have the right amount, there's a really good calculator available on our website that you can run some numbers and see if the levels that you have are appropriate for you.

Now nominating superannuation is a very important part of super.

And first of all, again, it's understanding.

Do you have a beneficiary nominated?

If you have a beneficiary nominated, what type of nomination do you have?

Is it binding or non-binding?

And then also looking at who you've nominated and making sure that that's kept up to date and still current with your wishes.

Because super doesn't actually form part of your estate.

So even if you have a will in place, then because your super is held in trust for your retirement, it's it's separate to your estate.

So very important to ensure that you know who will be receiving your super on your death.

So, within the accumulation phase or super phase, you can choose between a binding or a non-binding nomination.

A binding nomination, think of it as a legal document because the trustee will be bound to pay your beneficiary or beneficiaries, your super and any associated death benefits.

And that will happen in a timely matter because matter because it's, it's bound to, to those to pay those beneficiaries.

You must have two witnesses to sign on that form and it has to be completed correctly.

I would encourage if you are doing a binding nomination to just have someone run their eye over the form to make sure that you haven't missed anything because we can easily overlook things when we're completing forms because it has to be completed in full and it has to be a valid nomination for the trustee to accept that.

A non-binding nomination is think of it more like a preference.

You prefer this person receives your money.

There can be time delays with a non-binding nomination because the trustee is obligated to have a look out there and say who, who may be, who might be eligible or should be eligible to receive this money.

So that can cause some time delays and might not give you that surety that who you've nominated under that non-binding nomination is going to receive your money.

Reversionary nomination, that refers to pension phase.

So, when you're receiving an income on your super and if you're receiving income payments, you can put in a reversionary nomination so that that beneficiary continues to receive your pension payments on your death.

You can find more information about beneficiary nominations on our website.

Now, who can you nominate?

This is very important.

So, for it to be a valid beneficiary nomination, it can be your current spouse or partner, a child of any age, someone who is in an interdependent relationship with you.

So maybe you're caring for someone, maybe they live with you when you're looking after them.

That would be an interdependent relationship.

If somebody's financially dependent on you, that would also be a valid nominee.

And then finally, your personal legal representative.

So that would be your estate.

You can find more information about these types of beneficiaries on our website.

Consider though that these are superannuation nominations, so dependents for superannuation. There are also tax dependents, so there's some considerations there in terms of who might pay tax on money even though there might be a dependent.

We have a really good webinar called Estate Planning, so I'd encourage you to join one of those if you would like to know some more information in regards to tax.

Now, what can you do today to help your superannuation and your position?

We've spoken about contributions to super, so maybe you'll consider whether you can add a little bit more into your super.

Is that affordable?

What types of contributions could you make?

It might be checking your investment options.

Maybe just start with having a look at online or on the app and saying where, where's my money invested?

Does that align to my values?

And then also having a look at what insurance cover you have, understanding the levels of cover and then maybe doing a calculator to determine if they are actually the right levels of cover or appropriate for you.

And then finally checking your beneficiary nominations as well. Really important. Do you have a beneficiary nominated? Who are they and is that still current in accordance to your wishes?

Now you can have a look at a retirement projection calculator, it's very interesting available on our website and you can put in what your super balance is now when you expect to retire, and it will project out what that expected retirement capital will be. And you can have a play around with what if I add in some more contributions to my super, what does that do to my final retirement balance? It's very interesting activity to go through and it might also give some encouragement to maybe add a little bit more into super because you can see what that potential outcome could be for your retirement. So very interesting one to check out.

Now, I promised you I would let you know where to go for help and advice. So, there's plenty of options here on the screen. I referred to a few of those calculators throughout the presentation, so you'll find those australiansuper.com/calculators, that's the super projection calculator, the insurance calculator, so you'll find those on there.

I also referred to a few other webinars that are available. We have a range of many different webinars depending on where you are in your retirement journey that may be of interest to you, so I'd encourage you to go and have a look. Just like you've joined today, there are other options for different topics, so that's available at australiansuper.com/webinars.

You can also call our 1300 300 273 number. If you're an AustralianSuper member, you can request free simple super advice on things such as insurance, investment options and beneficiaries. So that's all covered in your administration fee. And if you're after anything more comprehensive in terms of advice, you can request to speak to a financial advisor and you can see there's a link there on the screen as to how you would find an advisor.

You can also call and request through the 1300 number for comprehensive advice and have a meeting with an advisor now for comprehensive advice. There is costs involved, but that would all be discussed with you and the financial planner. And then if that's agreed upon, they would look at your personal situation, what your goals are, and see how they can help you to achieve those and provide that to you in a statement of advice document. But that would all be discussed between you and the financial planner.

Now, before we wrap up, I would just like to reference our podcast. So, if you are like me and you like listening to a podcast when you're cleaning the house or driving somewhere, then you can have a look at our moments that count podcast. Very interesting with some interviews with members and different people who work in the fund. So, you can find the QR code there, or you can go to Spotify or wherever you listen to your podcast and search that in.

So, thank you for joining us today. As I said at the start of the presentation, I hope that you've taken at least one piece of information away from today's session that makes you feel more confident with your superannuation in understanding how it works in maybe a task that you can do to better your retirement outcome. So thank you for joining us today.

Understanding transition to retirement

Less work, more play. Sounds amazing, doesn’t it? Learn strategies to work less for the same take home pay. Or save more super and access a tax-free income when working after 60.

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Understanding transition to retirement

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Welcome and thank you for joining our presentation today, Understanding transition to retirement.

At AustralianSuper, we want our members to achieve the best possible outcome in retirement. And by understanding how a transition to retirement strategy works, it could be something that helps you to either boost your super in the lead up to retirement or give you the flexibility to work less. And we'll talk how through how those work throughout the presentation.

My name is Bec Barmer, I'm an education Manager here at AustralianSuper and my job is to help you better understand super and explain it to you in easy to understand terminology.

AustralianSuper would like to acknowledge the Traditional custodians of the land on which we work and we pay our respects to Elders past, present and emerging and extend that respect to all Aboriginal and Torres Strait Islander peoples. Today, I'm joining you from the land of the Larrakia people. It's still morning over here, so I just encourage you to acknowledge the land on which you're joining us today. And in some parts of Australia, it might be lunchtime or it could be morning for you as well.

Now, our presentation today covers a lot of information, but just keep in mind that this information is general advice only. And what that means is it doesn't take into account your personal circumstances, what your needs are, what your goals are, your objectives. So just keep that in mind before making any decisions. You might like to jump onto our website and have a look at our product disclosure statements that will give you more information. You can also call our 1300 number, which is 1300 300 273 and request to speak to a financial advisor. Please also keep in mind that past performance isn't an indicator of future performance now. Everyone's retirement journey is different. Some people might end up retiring before they plan to, and that might be due to a redundancy, or maybe you need to care for a family member. And some people might end up working longer than they had planned to. And that might be because they've reached retirement and just determined that, well, they're not quite ready to retire yet. Or maybe it's because they've realised that they might not have enough to do the things that they want to do throughout their retirement. So by understanding how a transition to retirement strategy works, it's going to arm you with the information that you need to be prepared as circumstances might change in the lead up to retirement.

So what we'll cover off on today is understanding what actually is a transition to retirement strategy. We'll talk about how it works and who is eligible to start a transition to retirement strategy. And we'll look through a different a couple of different ways in which you could utilise a transition to retirement strategy. And then we'll also talk through what the potential benefits of starting a transition to retirement strategy might be. And at the end of the presentation, we'll also go through where you can go for further help and advice.

So let's start with what is a transition to retirement strategy. Well, throughout your working life, your superannuation is accumulated and that's by receiving employer contributions. Maybe you're you already have done some salary sacrifice or made extra contributions, but a transition to retirement strategy allows you to utilise some of that superannuation that you have accumulated throughout your working life to transfer into a transition to retirement pension income account. And that can be started whilst you're still working. That might be casually, maybe you're working part time or full time. What happens is when you transfer your some of your superannuation in a into a transition to retirement pension account, you then start to draw an income stream from that transition to retirement account and that income then allows you to top up your take home pay. So those income payments would be paid into your bank account. And then that allows you to either utilise the strategy to work less because you've got that extra income coming in from the transition to retirement account, where your income from your employment might be less if you've reduced working hours. Or it might allow you to be able to pay more into your super account. And that might be through salary sacrifice or through tax deductible contributions by giving you that same take home pay because now you're receiving income from employment, but also from a transition to retirement income account, that might allow you to be able to salary sacrifice or pay more into your superannuation. And we'll talk through how that works in more detail as we move through the presentation. But when you start a transition to retirement, you need to have met what's called preservation age. And that is age 60 is also a bit of a magic number in, in terms of when you receive withdraw or take withdrawals or receive income from a pension account after age 60. Any of those withdrawals are tax free. So there are minimums that you need to draw down from a transition to retirement income account and there is also a maximum that you need to keep in line with. So the minimum is dependent on your age and that's the same pension minimum as if you were starting a regular choice income or account based pension. So you must draw a minimum pension and that depends on your age, starting at 4%. But the maximum in a transition to retirement account is 10% that you can draw down from that account. Now that 10% does reset on the 1st of July each year. So it's important to keep that in the back of your mind that it's 10% is the maximum you can draw down from a transition to retirement account.

So let's have a look through a couple of different ways that you can utilise a transition to retirement strategy. Well, you might utilise this strategy to save more. And how it works is you would set up that transition to retirement account by using some of your super and start receiving that income from the TTR account. Then you might decide to do some salary sacrifice into your superannuation account. Now, depending on what your tax rate is, you might be able to save tax by doing this. Now we spoke about after age 60, any of those draw downs from the transition to retirement income account will be tax free to you then if you're doing a salary sacrifice. Let's use a 30% tax rate as an example. So if you had $100 and your tax rate was $0.30 in the dollar, we'd have $70 left in your hand out of that $100, and then $30 of that would go to the tax department. Well, in that same scenario, if you had $100 and you contributed into superannuation, you would actually pay 15% contribution tax. So therefore $85 of that goes into your super and those tax savings. So that $15 tax savings you could use to accumulate your superannuation.

Now the other option to use this strategy for is maybe you would like to work less hours. So maybe in the lead up to retirement, you would like to spend some more time with grandchildren or do the things that you'd like to do. You're not quite ready to cease work completely. And maybe it's that easing into retirement that you'd like to to do. And it might be that you either work less hours or maybe reduce your working days. So in turn, that means that you're receiving less income from employment because you've reduced your working hours or days. So the transition to retirement account allows you to top up your take home pay by now receiving an income from the transition to retirement account.

Now let's look through visually how a transition to retirement strategy works. So we have our super account. So that will continue to receive employer contributions. Now the employer contributions, the superannuation guarantee rate has increased on the 1st of July, so it was 11%. It's now 11.5% that your employer would pay into superannuation. So this is the base foundation in this visual chart. So it's showing the super account, the employer contributions are going in, and then the employment income gets paid into your bank account. Now this next slide shows that some of that superannuation is then transferred into a transition to retirement income account. So you're still receiving that employment income into your bank account. And what you can see here is now a regular income stream is now also being received from the transition to retirement income account. So you can see that there on the right hand side of the slide, the income is being paid into the bank account allowing somebody to be able to then pay more additional contributions into superannuation. And that might be by way of salary sacrifice or it might be through tax deductible contributions.

So we're going to take a look a closer look at both of those different strategies. And we'll first look at how we can utilise a transition to retirement strategy to save more. So in the lead up to retirement, by using a transition to retirement strategy, it might allow you to minimise some of the tax that you're paying, and that's through paying in before tax into superannuation. So I gave that example before of the $100, well, depending on what your marginal tax rate is and the tax that you pay on your income, if it's a higher tax rate than the 15% tax that you'd pay on contributions going into superannuation, then you might be able to save some money through a salary sacrifice or by paying in pre tax into super. Now keep in mind that within a superannuation account or also in a transition to retirement account, you do pay tax on any of the earnings within the Super account. And that's also a concessionary tax rate of 15%. So 15% tax on contributions and then also 15% tax on any of those earnings within the fund as opposed to tax. If you had money outside of super, it would be taxed at your marginal rate of tax. Now just to recap on the types of contributions that you can pay into super, there's concessional contributions that cap limit. So this is your pre tax contributions that has increased from $27,500 thousand to $30,000 per year that you can pay in pre tax and that is made up of any of your employer contributions. So now 11.5% plus any salary sacrifice arrangements or tax deductible contributions. There are some carry forward rules that you might be able to take advantage of depending on your position. Good place to check that is your mygov account. But a carry forward rule allows you to utilise, if you haven't maxed that concessional cap over the last five years to maybe increase what you can pay in to superannuation. Now your balance must be under $500,000 at the 30th of June the year before. There's also non concessional. So after tax contributions, that cap limit has also increased. It was $110,000 and it's now increased to $120,000 per year. Also with the after tax contribution cap limit. There's also what's called a bring forward rule. So it allows you to bring forward two of those future years. So you can put in three years worth of of after tax contributions in One Financial year and that allows you to put in up to $360,000. But then you would forgo any of those non concessional contributions for the next two years. So just recapping there on what the other types of contributions are that you can pay.

So saving more with the transition to retirement income account. So that allows you then to receive payments from your transition to retirement income account into your bank account so that you can either receive that same level of take home pay if you need it to stay the same whilst also salary sacrificing into superannuation. And again, if we looked back at that example of the $100, those tax savings that you receive by utilising the strategy, it might mean that you can save some extra into your superannuation by minimising the tax that you pay.

So let's excuse me, have a look at Charlie. And Charlie's just turned 60 so he's reached the magic age of 60 and he would like to add more into his superannuation. He has currently $175,000 in his superannuation, he's earning $90,000 a year and he would like to retire in five years time at age 65. So, Charlie would like to keep his same take home pay but he would like to try and increase his super in those years to retirement. So in that five year period. So let's have a look through how Charlie can achieve that. Now keep in mind here, the superannuation guarantee rate is now 11.5%. So you can see on this slide here that this first scenario shows Charlie's income with no transition to retirement strategy. So this is his baseline, his existing position. So his gross salary is $90,000 per year. His employer superannuation contributions that are being paid into his super account at the rate of 11.5% gives him $10,350. That's going into his super through employer contributions. Now Charlie's income tax on his $90,000 of income is $19,588. So that gives Charlie in his hand a net income of $70,412. Now you'll see there there's tax on superannuation contributions. So that's the 15% tax that's paid on Charlie's employer contributions. So it's 15% of that $10,350. Now Charlie's superannuation is increasing. After that tax is paid on the Super contributions by $8,797 dollars. So let's have a look side by side If Charlie was to start a transition to retirement strategy, Let's look at what the difference might be for Charlie. So his gross salary doesn't change. He's still working his same hours.

The employer contributions don't change because he's still earning that same level of income. What you'll see next is that Charlie is salary sacrificing $19,650 in that year, which means that his taxable income has reduced to $70,350. So you'll see there if you look at that income tax section and it shows that Charlie is now paying less income tax because through those salary sacrifice payments, their pre tax, he is now paying less tax on his income. Now Charlie is also drawing down a transition to retirement income of $13,362. So that's allowing Charlie to top up his take home pay so that his net income remains exactly the same. You'll see that Charlie's paying more tax on super contributions. That's because he's now paying in the $19,650 of salary sacrifice, plus he's receiving $10,350 of employer contributions. So that $4,500 is the 15% tax on both of those contributions combined. So you'll see at the bottom there that Charlie's net super increase has now increased to $12,138. Now that is allowing Charlie to keep the same take home pay, but he has more going into his super simply by saving tax. So you can see there that that's an extra $3,341. So in summary, Charlie has maintained his same take home pay which was his goal that he would have liked to achieve. He's increased his super balance by $17,000 over the five year. He saved $3,341 in tax through in that first year through salary sacrifice. So you can see how this benefits Charlie in terms of building his superannuation in those five years till he retires. It's not impacted Charlie's take home pay. You can still continue to live the lifestyle that he had before utilising this strategy because his income is still the same, but he will have more in his super to give him that greater flexibility through his retirement.

Now let's have a look through how working less might. You might be able to utilise a strategy if you decide you'd like to work less in the years to retirement. So what working less with a transition to retirement strategy will allow somebody to do Well, you could cut back on the hours that you work. So it might be that you work less hours each day, or maybe you decide that instead of working a five day week you'd like to work four days or less. Now, how this works in this scenario is that by reducing those working hours, it means that less employment income is going to be paid into your bank account. So the transition to retirement account allows you to top up your bank account by receiving an income now from employment, which has reduced because you're reducing those hours, but now you're topping up that income through the transition to retirement pension account. So because your superannuation is is still open, remember that is still receiving some employer contributions as well.

Now let's have a look through this case study with Bella. So here we have Bella. She's also reached the magic age of 60. So tick she can she's met her preservation age, she can start a transition to retirement strategy. She's also at the magic age of 60 where any of those draw downs that she receives from her TTR account are tax free. Now Bella's take home pay is $55,000 per year and her current super balance is $150,000 and she would also like to retire in five years time when she turns age 65. Now Bella has decided that she would like to reduce from a five day working week down to a four day working week. But she still needs to pay her bills and her living expenses so she can't afford to change any of that take home pay of $55,000. So she would like to understand how she can utilise this strategy by reducing her working days per week. Now Bella has transferred $120,000 of her super into a transition to retirement income account. So you can see there the Super has been transferred to the transition to retirement. She's kept the superannuation account open to receive her employer contributions and potentially pay for any insurance that she may still have through her super account. Now Bella is now able to reduce her working days down to four days a week because she's now receiving that income to top up her take home pay from the transition to retirement account. Now what you can see here is by reducing Bella's working days down to four days a week, her net income. So the income that she receives in her hand has now reduced from that $55,000 to $45,843.

Now Bella needs to receive $55,000 in her hand to still continue to pay her living expenses. So now rather than receiving that money from her employer, she's now topping up her take home pay through the transition to retirement income account. So she's now drawing down $9,157 from the transition to retirement account and she's allowed to reduce her working days so that she's got that same take home pay. Now we'll have a look at Bella's position as a baseline so we can no transition to retirement. So Bella's gross salary is $67,335. Now Bella is also receiving employer contributions paid into her super at a rate of 11.5%. So she has $7,744 that's paid into her super through employer contributions. Now Bella's taxable income is $67,335 and she pays $12,335 in income tax on her income and that gives Bella $55,000 in the hand each year as her net income. You'll see there the tax on super contributions. Again, that's the 15% tax that's paid on Bella's employer contributions. And then that gives Bella her net super increase of just over $6,500, so that her super is increasing from those employer contributions less the tax on the contributions. So let's have a look side by side now what Bella's position would look like if she started to utilise the transition to retirement account. Now remember, Bella's situation is different to Charlie's. Charlie wanted to increase his superannuation and boost those retirement savings in the leader, but he kept his same working hours. Now with Bella, her main goal is to spend more time with her grandchild. So she's decided to reduce her working hours or working days rather per week. So you will see that difference here when we look through her strategy. So because Bella's reduced her working days, it does mean that she's receiving less employment income. So her gross salary was just over $67,000. But now that she's reduced to four days a week, her gross income is now just under $54,000 per year.

That also means that Bella's superannuation guarantee, so those employer contributions, have reduced because she's working fewer days per week.

So now employer contributions are going into Bella's super at just over $6,000 per year, and you'll see that Bella's taxable income has reduced, so she will pay less tax on her income because she's working fewer hours.

Bella is now drawing down just over $9,000 from her transition to retirement income account.

Now, drawing down that amount from the transition to retirement has allowed Bella to top up her take-home pay.

So she's still receiving $55,000 per year in hand now through a combination of her employment income and also now by utilising some of that income from her transition to retirement account.

Now you'll see there that Bella's tax on her super contributions has reduced because there is less going in.

And it also means that in Bella's circumstance, there is a lower amount going into Bella's super.

But remember, this for Bella was a lifestyle choice.

Rather than trying to build her super, Bella's main goal was to reduce her working days in the lead-up to retirement.

So she's foregoing some of those superannuation increases by being able to reduce her working days.

But she's happy, she has the same level of income, and she's able to spend more time with her grandchild.

So you'll see in Bella's scenario that she has $10,474 less going in, but it's a lifestyle choice.

So here you'll see Bella's balance at retirement.

If she didn't do a transition to retirement strategy, she would have $216,000 in her accumulated super account.

Now, with the transition to retirement strategy, Bella has less in that five years' time.

When she turns 65, she will now have $166,000.

But she has achieved her goal of having that extra day off over that five-year period.

As she eases into her retirement, you can see how those two different scenarios of utilising the strategy might meet somebody's different goals in terms of what their plans are in the lead-up to retirement.

And whether those plans or whether that situation is planned or whether it's unplanned.

It's good to have this in the back of your mind to know that there are options to utilise these strategies if circumstances change or to start planning for what you would like to achieve with your superannuation and your retirement nest egg.

Now, there are some things to consider when opening a transition to retirement income account.

You must have reached preservation age, which is age 60.

Remember, that's the magic number of 60, so preservation age, but also any of the drawdowns from super or the transition to retirement pension are tax-free after 60.

So you can move with Australian super.

You can move at least $25,000 from your super account into a new transition to retirement account.

That would be the minimum balance to start a transition to retirement account with Australian super.

Now, you also are required to have a minimum balance of at least $6,000 in your superannuation account if you're starting a transition to retirement pension account.

That $6,000 is there to retain the super account open to receive any of those employer contributions or potentially salary sacrifice or tax-deductible contributions.

And you may have some insurance cover underneath your super account that still would need to be paid.

So there needs to be that account balance to continue with that.

So some things there to keep in mind if you are considering whether a transition to retirement strategy will work for you.

Now, the payments are flexible.

When you're receiving an income stream from the transition to retirement, remember there is a minimum amount that needs to be drawn down from the transition to retirement account, which starts at 4% and it does increase per age band, and it is a maximum of 10% that you can draw down from your transition to retirement.

You can choose your payments how you're paid.

You can choose your payment frequency.

You might like to be paid fortnightly or monthly or quarterly, or maybe it's even yearly.

And you can choose how your money is invested.

As you have a choice in your superannuation account to choose your investment options, you also have a choice in your transition to retirement account to choose where your money is invested.

Once you've reached age 65, your transition to retirement account can move into a Choice Income account.

You can also open a Choice Income account or an account-based pension if you've changed jobs after age 60, if you retire, or when you turn age 65.

These are all called conditions of release to access super.

If you've met one of these conditions of release, then that 10% maximum in your transition to retirement account, that cap is then lifted.

Once you move into a Choice Income account or an account-based pension, then that 10% cap is lifted.

You still need to draw down a minimum pension, but now there is no maximum on how much you can draw down from a Choice Income account.

The other benefit of moving to a Choice Income account is that any of those tax on earnings.

Once you're in the Choice Income, that is minimised as well.

So instead of 15% tax on earnings through super and through transition to retirement accounts, there is then no tax on earnings in a Choice Income account.

These are the conditions of release.

Have a look through those.

Turning 65 is another one there as well.

Now, something else to keep in mind is that there is a transfer balance cap.

It means that there's a limit on how much you can transfer from super into an account-based pension.

That transfer balance cap is currently 1.9 million and it does depend on your personal circumstance.

You will find more information about that on the ATO website if you would like some more info.

Now, where can you go for some helpful resources?

You can learn more about transition to retirement at australiansuper.com/TTR.

You can have a look at the transition to retirement booklet which is available on our website as well.

You might also like to register for a preparing for your retirement journey presentation.

That's a longer webinar, but it does go through a lot of helpful information in preparing for your retirement.

In terms of government age pension, it will go into the income and assets test.

Quite a lot of information there in terms of the things that you might like to think about when preparing for your retirement.

Another good one to have a look at and there's a lot of calculators available on our website so you can have a look at australiansuper.com/calculators.

We have retirement projection calculators on there, which is very interesting if you wanted to have a play around with what your balance is now and when you would like to retire and what your projected balance might be.

You can also then play around with what if I put some extra money in?

What does that look like and how does that change your final retirement balance?

There's some other good calculators available as well in terms of calculating insurance and things like that, if that was of interest to you.

We have a range of other webinars just like the one you've attended today on a range of different topics.

So you'll find those on our website at australiansuper.com/webinars.

Have a look at that.

If you are wanting to speak to a financial advisor and receive financial advice, you can either call 1300 300 273 and request simple super advice.

As an AustralianSuper member, you can receive free simple super advice on things such as investment options, you're not sure where to invest your money or beneficiary nominations or insurance.

You can speak to a financial planner.

If it's anything more comprehensive, then it would be more tailored comprehensive advice that you might need to be receiving.

You can ask to speak to a financial planner or you can search for a financial planner in your area.

If you do decide to go down the road of financial advice, the financial planner would go through a comprehensive fact-finding meeting with you, get a really good understanding of what your base position is.

So assets, income, what your goals are and what you want to achieve.

Then they would, once it was agreed upon that they could help you and you wanted to go through with the advice and you'd agreed on fees, then they would provide you with a statement of advice document which will then detail all of those recommendations and how you can achieve your goals.

The planner would talk to you about what those costs are involved if it is advice that you're seeking.

You can find a planner on our website or you can call and request to speak to one over the phone.

But before we wrap up, I would just like to mention this.

We have Elements of Retirement guide.

It's a really good interactive tool.

If you haven't been on to our website, australiansuper.com/elements-of-retirement, I'd encourage jumping on and having a look.

It's a really good tool and it's interactive in terms of where you might be in your retirement journey and you can drill down into certain points in your retirement journey and find extra pieces of information as you go.

Have a look at that and see.

It's quite an interesting tool that you can work through and find more information relevant to your point in your financial journey.

So thank you for joining us today for our understanding transition to retirement presentation.

We hope that you've taken away at least one piece of information that has made you feel more prepared in planning for your retirement or explain something that's a little bit easier to understand.

Supercharge your income in retirement

If you're retired, or approaching retirement, hear about strategies and government benefits that may help to boost your superannuation in retirement.

Supercharge your income in retirement

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My name is Bec Balmer and I'm an Education Manager here at AustralianSuper and I've spent the last 20 years in the financial services industry helping people become more confident with their finances and then intern in their retirement so that they can actually enjoy those years that they've worked so hard for.

Today's presentation should last for about 30 minutes.

We have over 60,000 years of history to learn about from the traditional custodians of our land and waters and we should feel privileged that in this country we are sharing in the rich culture, the heritage and also the continued relationship with those land and waters. I'd like to pay my respect to Elders past and present, and extend that respect to all Aborigines and Torres Strait Islander peoples. Today I'm joining you on the land of the Larrakia people. So I just encourage you to take a moment to acknowledge the land on which you're joining us today.

Now, before we get going, I do need to point out that there is a lot of information we'll cover off on today, but it is general advice only. So what that means is it doesn't take into account your own personal needs and circumstances. So if you do feel like something sounds like a great idea, then just do some research. Have a look at the product disclosure statement and the target market determination and just make sure you do some research before going ahead with anything to make sure it is suitable for you.

So today we'll cover off on three key areas. We'll follow along with a case study and we'll look at different ways that you can boost your retirement income. We'll also have a look into different government benefits and incentives. And finally, we'll have a look at where you can go for extra help and advice.

So let's kick it off by meeting Jim and Sandra. So they're two of our members who've been retired for a couple of years now. They're a happy couple, as you can see in the photo, and they own their own home. So they have determined that to live comfortably and to do the things that they would like to do in retirement, they need $75,000 per year to live comfortably. So they have combined $200,000 in a bank account. So that does include some money in an offset account. They do have a small loan against their home of $5000. Now Jim has $350,000 in a Choice Income account and Sandra has $80,000 also in a Choice Income account. They are unsure if their level of income will be sufficient to last them throughout their retirement.

So what we'll have a look at is Jim and Sandra's position as it stands now and to support their $75,000 of income per year, they're receiving just over $29,000 of income from the Government age pension, which means that they are topping up their $75,000 of income requirements from their Choice Income accounts and they are receiving just under $46,000 combined from those. Now it's projected that their income will last to age 86, and that means that it'll be about 17 years before that money will run out. Now, whilst this is a good a good outcome for Jim and Sandra, we're going to look at some of the other possible strategies that they could consider to increase the longevity of their funds so that their money lasts them well beyond their life expectancy.

So the first thing that Jim and Sandra could consider is topping up their retirement savings. So first we'll have a look at some different types of contributions and we'll have a look at the cap limits that apply to those. So first of all, we have our before tax contributions and they are otherwise known as concessional contributions. There's a $30,000 cap limit per year currently on those. Now what makes part of that cap limit It's any employer contributions. So that is the amount required under the Super Guarantee for an employer to pay into the employee's super account. That is currently paid at a rate of 11.5% which increases to 12% on the 1st of July next year. Also included in this cap are salary sacrifice arrangements. So that would be you have gone to your employer and said I would like to sacrifice X amount of my income rather than that getting paid in my bank account. I'd like that to go to superannuation also any tax deductible contribution. So that is that you've decided to pay some money into super and then you've decided to claim a tax deduction on that money. Now it is important to note that you if you're between the ages of 67 to 74 to do one of those types of contributions you need to do need to meet a work test and that is to work at least 40 hours in 30 consecutive days.

The other types of contributions are after tax and they are also known as non concessional. Now there's a higher cap limit for that per year and that is currently $120,000. Now what makes part of that cap is any voluntary contributions. So you've already paid tax on this money and then you decide to put some money into superannuation. It also includes any spouse contributions and the Government Co Contribution also falls into that. Now just thinking about Jim and Sandra, so they've been retired for two years, so they're not currently working. So they may consider whether doing some after tax contributions might be suitable for them because that means they don't need to meet a work test under that after tax contribution cap limit.

Now the bring forward rule is where you were thinking about our after tax contributions here, so non concessional. So that amount was $120,000 per year. This bring forward rule allows us to bring forward the future two years of that cap limit and pay in a total of up to $360,000 in one financial year. So maybe it's that somebody's received an inheritance or like Jim and Sandra, they have some money in their bank account that they might be considering to move into the super environment.

So it does need to be a consideration with what your total super balance is on the 30th of June of the previous year. But please research some more information if you are considering using this bring forward rule.

Now, as we could see, Jim and Sandra receive a part government age pension, and we know that many members find understanding how the age pension works sometimes confusing. And it's a really good opportunity for us to touch on that now and just have a refresh as to what government benefits and incentives are out there and how they work. So the first we'll have a look at is the age pension. And to apply for it you need to meet some eligibility criteria that are set out by the Australian government. And the first one is age. So you must be aged 67 now to apply. Your residential status is also assessed, then it'll also be an income and an assets test assessment. You'll be determined on which test you are assessed under and then you'll need to disclose all of your assets and income. We'll talk a little bit more that about that as we move through the presentation. But just to note that your assets and income may change over time. So maybe you've applied for the government age pension and maybe they've said you your assets or income is too high and you you aren't eligible now. Well, that doesn't mean that in future your circumstance might change and maybe you'll be eligible in future years. So it is worthwhile just checking back to check what your accessibility is. Also, if you are receiving a pension, it's important to let Services Australia know if there's any change to any of your assets or income level and then your age pension will be adjusted accordingly.

So as you may know, the government age pension, it's a fortnightly payment and it's designed for Australians to pay for basic living expenses. So if you're eligible, the age pension can supplement your super or other forms of income that you may have once you've finished working.

So let's have a look here at the assets test. So if you're assessed under the assets test, any investments that you have that could be an investment property, maybe there's managed funds, any shares in a share portfolio, any bonds or maybe you have term deposits will all be assessable. Any superannuation accounts, if you're over the age, pension, age of 67, anything you have in in so super and pension that includes your transition to retirement accounts. Household contents. Now think of that more as a fire sale value, which is often different to the amount that someone might have insured under a contents insurance. Cars, boats, caravans are also accessible and then there are gifting rules to adhere to as well if you are giving away some money. Now what's not included is your family home. So the principal place of residence, any super accounts that somebody is underage pension age. So think of an example where there's a member of a couple and say one person is is 70 and the other person is 60. Well, the person who's 60 under the age pension age, their superannuation account wouldn't be accessible, but the person who's 70 would be. So there are some considerations there. And then of course the funeral bonds and cemetery plots are exempt.

Now if you're assessed under the assets test, this shows what the maximum assets you can have to receive either a full pension or a part pension or no eligibility for a pension. So if we just have a look for an example at a single person who's a homeowner, so if they had assets under $314,000, they would be eligible to receive the full age pension under the assets test. If their level of assets was between that lower threshold and $695,500, then they'd be entitled to a part government aged pension. And any assets above that higher threshold would mean that they wouldn't be eligible for any age pension. And you can also see the figures there for a a single non homeowner and then also both of those for members of a couple.

Now if you're assessed under the income test, this shows us how much income that you can receive before you will be eligible for either a full pension, part pension or again, no pension. So let's have a look at the members of a couple this time. If they had $372 or less than that per fortnight of income, that's assessable and then they would be entitled to the full age pension. And then you can see the upper threshold for members of a couple is $3822 per fortnight. So anywhere in between that a part pension would be payable and then of course that higher threshold and no pension.

Let's just stay on the income test for a moment. Now when Services Australia are assessing income, it can be a little bit confusing for our members because if you think about a term deposit for example, maybe the income that's being earned in that term deposit for example sake is 5% interest. Well, the deeming rates that are actually assessed is that for the 1st $62,600 of assets that income is assessed at a rate of 0.25% and any amounts over that are deemed income of 2.25%. So it's a more concessionary considered rate of income, but something to keep in mind there as well. And you'll also see members of a couple and those figures there now whilst their age pension rates determined through the assets and income tests. There are some tips that you can consider that can help you to get the most out of your government age pension. And the first one is checking your asset values. So just confirming that those figures that Centrelink have are correct. And I'll use an example here.

My mum's been retired for a few years and she was getting a certain level of age pension income and then all of a sudden that income level dropped significantly. So she checked the details that Services Australia had and they had actually incorrectly recorded her assets to be a higher value, which in turn meant she was getting less age pension. She was able to adjust that and then continue to receive the right amount. So it's important to check your asset values and just make sure that they are as they should be throughout your journey.

You can consider gifting, but just keep in mind that there are some rules and limits that apply with that. It allows you to gift $10,000 in one year or $30,000 over 5 years. If you gift more than that, it means that anything above those limits will be accessible through the means testing process.

You can consider whether you have some money sitting in bank accounts or in other assets that you would like to start doing some renovations around the home. Remember, the principal place of residence or your home isn't accessible. So if you do some home modifications, you may be able to reduce your asset value by putting that into some modifications to the home.

Consider whether, if you've got any non-deductible debt, you should pay that down. Remember the interest rates to consider on any of those non-deductible debts. Think credit cards or maybe car loans or personal loans. But if you think about a credit card, then paying off that amount is not usually subtracted from the amount or the assessable amount from Services Australia.

Finally, consider the structure of your assets. When we were talking about members of a couple and there might be one younger spouse who hasn't quite reached age pension age, maybe it's some consideration there in terms of what you can do from a strategy perspective to take advantage of that younger spouse and maybe super not being counted at that point in time. But of course, for any of these strategies, it is important to think about your own personal circumstance and also consider seeking financial advice if you are thinking about doing any of these things.

So let's have a look at Jim and Sandra now. They've decided to seek financial advice and it's been determined that they're going to add $110,000 into superannuation. They're going to do some renovations to their kitchen at home, spending $40,000 to do that. They had a $5000 home loan, so they're going to pay that off to get rid of all of their debt and any associated interest payments. They're also kindly gifting $10,000 to their grandchildren to help with some of those school fees. They've decided that they would like to have an emergency fund of $35,000 kept in their bank account that they can easily access.

Here we'll see what Jim and Sandra's position looked like before they received financial advice and then after advice. What you can see is that Jim and Sandra's asset value reduced by $55,000, which meant that their age pension increased by just over $4300. This is through doing that $40,000 renovation to their kitchen, the $5000 debt, and also gifting $10,000. So what does this mean? It means that Jim and Sandra can draw less from their superannuation account because now they're getting more from the government age pension. What happens here is the longevity of their accounts lasts for an extra 8 years. So that's a great outcome for Jim and Sandra simply by changing how they're doing things in terms of their asset position and income position.

Our case study had a look at using an Account Based Pension for Jim and Sandra's needs. What are the benefits of an account based pension within Australian Super? We call it a Choice Income account. You must take a minimum pension from the account per year. That minimum is reset on the 1st of July every year. Depending on what your account balance is, keep that in mind. You can have a look online at Services Australia to see what those percentages are and it does change per age category. You can withdraw money anytime. Even if you have set up a regular income stream from a Choice Income account and maybe you needed some extra money to go on a holiday and you needed a lump sum, you have access to that at any time as well. Any money that you draw down from a Choice Income Account after age 60 is tax free and also within that pension account any earnings that are generated are also free of tax. If we compare that to the accumulation or super environment, there is a 15% tax on any earnings. Well in your account based pension there is no tax. So a great place for your money. You can also top up any of your age pension amounts. If you're receiving a certain amount from Services Australia and that changes due to different positions, then you have the ability to change the amount that you take from your Account Based Pension.

Now following financial advice, Jim and Sandra received advice to pay some money into superannuation. But remember we said at the start that both Jim and Sandra had Choice Income accounts. So how are they going to get that money into super? Because we can't directly contribute into a Choice Income account. What they can do is set up a new superannuation account. They've decided that they're going to set that up in Sandra's name and contribute $110,000 into a new super account for Sandra. They've moved that money from their bank account into the new super and then what they are doing from there is rolling back Sandra's $80,000 that she had in her Choice Income account into the super account. They're consolidating all of that $190,000 together and then opening a new Choice Income account. Keep in mind here that because a new Choice Income account has been established, with a higher amount, any of those pension minimum amounts are also reset. Just something to think about there. But any income that's drawn down is tax free because she's over age 60. That is how you do it. We get questions from members all the time in terms of, well, how can I add more into the Super environment if I have a Choice Income account? Just keep that one in mind. If you do need extra help, I'll show you where to go to seek advice at the end of the presentation.

Not all members have extra money that they can pay into super, so let's have a look into another case study where we can consider some of the other things that somebody could do if they can't put more money into superannuation. Here we have Sally. She's 74, she does own her own home and she's retired. She's determined that she needs $44,000 of income to meet her living expenses per year. She's already retired and she has now exhausted all of the money that she had in her Choice Income account and she's receiving a full age pension. Just to put a little note here, Sally's receiving a full age pension, which is currently just under $30,000 per year. We can see that there's a $14,000 per year shortfall that Sally has to meet her living expenses. The value on her home is $600,000. Let's have a look at some of the things she can consider.

The first thing is the work bonus. This is an incentive from the government which reduces the amount of assessable employment income under the income test when thinking about the government age pension. What are the benefits of this? It allows somebody to return to work maybe on a casual basis or maybe they're missing the social aspect of being around workmates and want to go back to work for that reason. This allows them to do that. The first $300 per fortnight of that gross income is exempt under the income test. That's something to think about if you are thinking about returning to work on a casual basis and you have already retired and are receiving the government age pension.

Another thing to consider is downsizer contributions. We spoke earlier about the two types of contribution caps and that was concessional and non-concessional. If we just move those to the side for the moment, we also have the one-off opportunity to use a downsizer contribution.

And it's if there's a member of a couple, it allows a total of $600,000. So they can both do it from the proceeds of the sale of a home. Now there are some considerations there. So if this is some something that you're thinking about, make sure you do some more research on it. But it does need to be done within 90 days of the property sale and there are some considerations there with CGT and it being exempt for a certain period now.

There's also the Home Equity Access Scheme, which enables those who are eligible to take out a loan against the equity in their property. So this can be done under circumstances where, you know, maybe somebody doesn't have any other source of income and and like Sally, she's not able to fund her living expenses. It is important to note though that you do need to repay the money and interest will apply. So if it is something that you're considering again, please seek some financial advice and you'll see there's a link up there on the screen as to where you can go For more information. But things to consider with this that the interest that's charged can change. It also can reduce the equity in your home and impact any potential ability to pay for aged care facilities. And also think about, you know, if there was an inheritance to leave that you wanted to, how that might impact that.

So what can you do next? Well, you can review the value of your assets if you're receiving any age pension at the moment and just make sure that they are listed correctly. If you are considering contributing more into your superannuation account, do some research as to how you can pay in thinking about the types of contribution cap limits and also the different ways you can make a contribution and think about also those age limitations and whether a work test needs to be met or not. You can find out more information on topping up your superannuation through australiansuper.com/grow. If you are thinking that the Home Equity Access Scheme is something that you'd like to consider, we just suggest doing some more research on it and you will find more information on the Services Australia website.

Review your estate planning. So have a look at your whether it's a super account or or an account based pension and look at the beneficiaries that you may or may not have nominated and make sure that that is how you would like your super savings to be distributed when you're no longer here. Think about, you know, your other estate planning needs as well and seek some advice on that if you need some help. And then finally consider where to go for extra help and advice. Now we have a range of different calculators. On our website is a really great super projection calculator that you might like to have a look at. You can pop in what your super balance is now and the age that you would like to retire if you haven't already and look at the longevity of those funds. You can also have a look at other webinars that we have. No matter where you are on your retirement journey, we have webinars that can help provide you with more information, so check those out. You can call 1300 303 273 and request to speak to a financial planner for simple super advice. If you do require more comprehensive advice, you can find a financial planner in your area. You can request to speak to a planner and they will go through the process of talking to you about how they would tailor financial advice for your specific circumstance and of course the costs involved to do so.

Now another really good tool that AustralianSuper has is the elements of retirement guide. Now this is an interactive tool that allows you to no matter where you are on your retirement journey, you can delve into different tools and tips and and real life stories. So case studies like we've run through today that can help you to find out more information. So if you haven't had a look at it already, go to the link that's on the screen and you'll find out some great information there as well. And finally, if you're like me and you like listening to a podcast, AustralianSuper has one called The Moments That Count. And this is hosted by the head of member products Guidance and Advice, Shane Hancock. It's very interesting to listen to and he talks to different members and industry experts about all things superannuation to listen to now. Thank you for joining us today. We hope that you've been able to gain some useful tips or information that can help you to supercharge your income in retirement.

So have a lovely afternoon and thank you for joining us.

Keep your super safe online

Superannuation is likely to be one of your largest assets. Understand how to keep it safe from scams and fraud events.

Keep your super safe online

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Thank you for joining us. My name is Peter Treseder, I'm an education manager at AustralianSuper and I've been helping members understand their super better and hopefully engaging with their super more to put themselves in a better financial position when retirement eventually comes. The topic today about keeping your super safe online, I have with me Cat Burke. Cat is one of our member-facing fraud specialists. Now fraud specialist sounds a bit sinister Cat, but you need to know what's going on to stop what's going on. So welcome Cat.

Thanks for having me. AustralianSuper does acknowledge the traditional custodians of the land of which we work and we pay our respects to their Elders past, present and emerging, and we extend that respect to all Aboriginal and Torres Strait Islander peoples. AustralianSuper's head office is on the land of the Wurundjeri people of the Kulin nation and today we're talking to you from the lands of the Taungurung people and the Bunurong people.

What Cat and I are talking about today is general information. We don't know your personal circumstances, wants, needs, desires, etcetera. So what we're providing is general information. If you got to make a decision about AustralianSuper, please read our target mark determination and our product disclosure statement.

So looking at the topic, what are we going to be looking at today when it comes to keeping your super safe online? I'm going to look at what data breaches are, the various scams that are around, how to identify them, looking at how AustralianSuper protects members and also providing you with a number of different tips to help you keep your super safe.

So we hear Cat all the time in the news about data breaches and there's been quite a few, well, a number over recent years, some affecting well-known company household names. Yeah, absolutely. You can't sort of look at a news website these days without seeing a more recent data breach. Obviously, we've had a few sort of where people where companies have been held to account and threatened with their customers' data to be leaked on the black web and that sort of thing, or the dark web. But a data breach is, yeah, something that I think that everybody's encountered these days in the news.

So we see them in the news and there's reports of a data breach. But if we dig a little bit further, how would you describe a data breach? Yeah. So data breach is the equivalent of somebody coming into your house, getting your passport, they might find your birth certificate, they might get copies of your bills and that sort of thing. And then having access to all of that personal information. The difference with the data breach rather than somebody breaking down your front door is they often get that information online. So it's usually facilitated through electronic devices, the Internet, and usually the threat is to your own personal security or your financial health. So a lot of it comes down to privacy issues, but it can really result in a lot of time lost for yourself, but a lot of money as well. So there's, yeah, huge consequences for it.

So the breach can happen for your own personal devices, but it can also happen through a service provider that you use, government agencies, or even your employer's payroll systems we've seen be targeted as well. The big call out for a data breach is that if you are a victim of a data breach, then you're so much more likely to be a victim of a scam. OK. And these data breaches. Thanks for that. And so before I meet go any further, if you do have questions, please type them in the Q&A box. I have some colleagues behind the scenes that are ready, willing, and able to answer your questions, and they'll also be putting some links in the chat that relate to what Cat and I are talking about.

So this data breach is the virtual break-in where someone's usually breaking. People sneak in and pinch something, this way they're sneaking in electronically. So what are some of the scams or the types of scams we've seen recently? Yeah, so there's obviously a lot of different scam types. We see one thing with scam is, is they're always continuing to evolve. So a scam is a crime of opportunity where the person is usually tricked into believing the personal organisation that they're dealing with is genuine. We see a lot of our members be victims of scams at AustralianSuper, but a great resource which I refer to regularly is the Scam Watch website, which is where sort of these sort of little data points have been taken from.

But we do see a lot of different scams, predominantly at the moment we're seeing online dating scams. So that's where a scammer builds a personal relationship with you to gain your trust and your money. And then they make you believe that the relationship is real. They manipulate you into giving them your money over time, which, Yeah, is usually sort of quite heartbreaking because you genuinely believe that the person you're dealing with has your best interests at heart. But realistically, it's quite the opposite. We see investment scams as well, so that's where our members might be looking to make money through investing. They'll go and do a little bit of research online and then the scammer will convince you that they're going to be able to make you more money than you could ever make by yourself or with more traditional platforms such as your superannuation.

And then the last one that we see quite a bit is impersonation scams. So that's scammers impersonating trusted businesses, friends or family, and they'll convince you to transfer money to them all, obviously in an effort to steal that money from you once they have it. But more valuable, and well, sometimes more valuable is your actual personal information. Not just the money that can be lost through this, but the time it takes you afterwards to protect yourself is something that some people don't think about. Yeah. And I think we've all had those. We've seen those impersonations. I think most of us have probably got that email from the Nigerian Prince promising to give us multi millions of dollars. And look, I, I had one, oh, maybe two years ago where I got a text message allegedly from my son that something had happened to his phone. And Gee, it was, it was very convincing. It wasn't until I took a bit of time to stop and think about it, that I realised this, this doesn't weigh up.

And so they're the types of scams. How are the scammers trying to reach out to us? Yeah. So you can see on this slide that there's numerous ways, but I want to focus on the top three reported ways, which is text messages, phone and email. So quite often you'll receive text messages from government organisations, businesses that you deal with or even your own family or friend trying to catch you out. So good example being the message that you received. Just recently I received a message from Amazon trying to tell me that there was a seven and a half $1000 transaction on my account and was this legitimate? Do I actually need to buy a, a spa bath and to please click on this link to dispute it, which obviously any text message that has a text link in it, you always have to be a little bit questionable of.

Phone scams is a big one as well. So that's cold callers. That's somebody giving you a call to try and convince you that they are who they say they are? This is another one that I get quite regularly, which is the ATO calls asking me to log in and lodge my tax return. Otherwise, they're going to send out police because there's a warrant for my arrest. And I promise you I've done my tax return at least for the last few years. So that's another one that sort of seems to come out quite a lot is those cold calls trying to convince you. If it's not from an organisation, it'll be from Microsoft or your bank trying to convince you to log in while they're on the phone. That's usually a good sign.

And then the last one that we see quite a lot is email scams. So to your Nigerian inheritance, it's definitely one that we see quite a lot and it's either going to be a completely out of the blue dead relative or it will be something along the lines of a bank impersonation where it looks like it might have come from the genuine bank, but there's always sort of slight differences. The wording could be incorrect. You'll see the sender is a little bit not genuine, or they're asking you to click on this link and log in. And don't worry about calling them to verify it just definitely trusts that they are who they say they are. Yeah. And often you'll see, as you're saying in those emails, the grammar's not right, The salutation of hello, Peter Mann or something like that. But just sort of throws you off straight away. I think I've probably got the same one from you about Amazon that was new straight away because I don't even have an Amazon account.

So they're trying all different ways. But then it costs, it costs Australians lots of money in a number of various ways over the, if we look over the recent years Cat. Yeah, absolutely. So $2.74 billion in losses in 2023 alone as reported to the ACCC. 1.3 billion of that 2.74 was investment scams. But something to keep in mind is this'll only be the scams that have been reported to the ACCC. So there's a lot of the time when somebody has been a victim of a scam, they're embarrassed that they fell for it. Scammers are really sophisticated. They're very well practised in what they do and they target people who they consider vulnerable. So scam is a crime of opportunity. It's where they will send a text message out to, you know, 100,000 people and if they get just one person, that's a good day for them. The problem is, and we see it all the time as well, where our members might fall victim to scams and they're embarrassed to tell us. They might be embarrassed to call the police. They might be embarrassed to tell their families and friends, which you should never be embarrassed. It's, it's happened and there's people around you and there's organisations and there's people like myself who are here to help you. You should never be embarrassed if you fall victim to something like this.

Yes, as you said, this is what's been reported. There's probably a lot more that hasn't been. So if we bring it a bit closer now into superannuation world and the scams and frauds, how are these scammers targeting super? Yeah, so for a very long time, superannuation wasn't targeted. For a very long time, it was all about banks. But in the last sort of 10, 15 years, we've seen superannuation really be targeted. One of the big ways is staging accounts. So back to the data breach that we were discussing earlier, a staging account is where a fake member account is created for people who aren't aware that their identity is being stolen. We next see these accounts used as an unauthorised rollover. So an unauthorised roller is where the scammer has taken that information, created the staging account and then they rolled someone's genuine retirement savings into that fake destination account. By either creating that fake account or we see a lot of mygov portal accesses where someone has been able to get your mygov password or get into the ATO portal and sort of access your personal information. We have seen a huge uplift in the protections that the ATO and the advancements that the ATO has made though. So we have seen those drop off quite significantly, which has been great.

We also see it AustralianSuper, a lot of member impersonations. So this is where someone will call, write or message a contact centre pretending to be the genuine member to change their contact information, reset their password to access their online account and then request a benefit, so a withdrawal from their super account. And then finally, we see a lot of early release, So illegal early release, which is sometimes where we see the actual genuine member slowly deplete their retirement savings by claiming financial hardship and then rolling it over to another super fund and doing the same thing within a 12 month period, which is against the legislation around financial hardship. But we also see early release in terms of departing Australia, super payments and compassionate ground payment applications being received when the member wasn't eligible. These payments are managed by the ATO, which again does make it really difficult for super funds to identify.

OK, so this is where it's important that if something's happening with your account, take note of it because I know not like me and not everyone's as excited about super as I am or engage with super. So it's important that if something does come through, not to ignore it because it could be someone being shifty around your account. And if you're not taking note that they may take some actions. And I think often when we talk about these things, it's best to put it into context by what has actually happened with a member. And you recently had a situation with a member through fraud called I think it was Connie. Yeah, absolutely. So. Connie had been a member with AustralianSuper for about 50 years. I mean 15 years. Goodness. And Connie's 60, so she's right at that age where she's starting to consider retirement, but she's considering what her investments will look like for the next few years. So yeah, Connie was a lovely member who I had the opportunity to sort of work with. But so essentially, Connie was searching for an online way to improve her retirement benefits and increase her investment returns. She found a website that promised to do this in a crypto fund investment, which she signed up for. So she's entered all of her contact information. She's uploaded a copy of her driver's licence and her passport. Because quite often when you deal with genuine investment funds, they'll ask you to provide all of that when you onboard or when you sort of first engage with them.

So after all that had been uploaded, the scammers contacted Connie and convinced her to transfer a small amount of her AustralianSuper balance into her bank account and then told her to move it again into the scammer's bank account. And then they moved it into this crypto platform, which they said was amazing. So she was then shown a website detailing her balance, showing how much it had increased in a short amount of time. And then she was sold. So she then tried to move the remainder of the funds to a new bank account. So our flags then alerted to us and it was flagged by the member protection team. The second withdrawal was a significantly large amount of Connie's balance. So we gave her a call and that we asked a few more questions and it was through asking those questions, asking her to share us the website that she was investing in. We were really fortunate with Connie that she was willing to have those conversations with us. Sometimes we might have that conversation and it just gets people's backs up a little bit. They don't want to have that conversation with us. But we identified that the website wasn't genuine and that Connie's first transaction wasn't actually invested as she thought she was, so the remainder of Connie's Super balance wasn't transferred out. Thanks to that call and Connie's willingness to have that conversation with us, we were able to protect the funds with AustralianSuper and help Connie as well. So she felt really silly. But through my conversations with her, the most important thing was protecting herself, resetting all of her online passwords and just doing what she needed to do to make sure that these people couldn't get anything more from her, but also the information that she'd shared with them wasn't going to be able to use further.

Yeah. And I think that's the important part, that Connie's experience. The website looked legit. The numbers looked legit. Everything was there. But like you were saying before, often it's that temptation of more than possibly could be imagined and if it's too good to be true, maybe it is. So the member protection team got involved there when that second transaction was being made. How is that member protection team working and protecting members' information? Yeah, absolutely. So we take a multi-pronged approach. Obviously with scammers, they're very sophisticated. So we need to do everything that we can to address the threat before it happens and do what we can when it is identified. So at AustralianSuper we invest in financial crime and information security teams. I'm obviously one of those people and we're every single day committed to protecting members from harm. We have a security programme which delivers enhancements as part of that strategic road map in response to constantly changing environments. We do education and awareness. So thanks to all of our members who are joining us today. One of the best things that you can do after this is take the tips and share them with as many people as you can. You don't even have to tell them that it was Cat Burke and Peter who told you to do it.

We do data governance as well, so continuously refining data retention, archiving and destruction standards to reduce the risk of data loss. We're proactively responding to new threats and we protect members associated with recent data breaches, being that from employers or companies that we're aware of, we actively protect those members and finally through collaboration. So one of the most important things that we do is we work with law enforcement, regulators and industry partners to combat the increasing threat of cybercrime and fraud. Yeah. And it's that collaboration part that really helped Connie because she was open to say, well, this is what I had. This is what I've seen. So if you're aware that something doesn't look right, we're certainly going to help you. And the more you get involved, as Cat said, the more you tell others, the more you're probably going to help the next person.

So if we bring it down now to a personal level, what are some of the ways that I can protect myself from scams? Kat. Yeah. So information security is about keeping your personal and financial information safe from cyber criminals and scammers. So just like you would use a lock to protect your house or your car, think of your information security as a virtual lock. So you want to think about protecting your own personal and sensitive information online. Just be aware of what you're sharing. Preventing our devices from being accessed without our consent. So that's a big one that we see a lot of is, you know, be aware of what Wi-Fi you're connecting to, that sort of thing and preventing cyber criminals from stealing our valuable information or causing us harm. So just being aware of, you know, where did you leave your wallet? Was it in your car, in your front yard overnight? And it's been broken into. It's not just about online cyber criminals, but it's also your personal information as well in that hard form.

And that's keeping and making, I suppose passwords better than just password or ABC1234. So what would be some of your tips to help people protect their privacy and identity? Yeah. So the best thing that you can do is with your financial institutions, and obviously AustralianSuper being one of them, is keep your account information up to date. Do we have your correct phone number? Do we have your correct email address? If anything happens, we're going to try and contact you or you're going to contact us. And that's going to be one of the first things that we ask you is, is the information that we have up to date creating a passphrase, rather than just using your dog's name +1234 as your passwords for every single website, use a passphrase. So for example, something that someone wouldn't be able to guess like so purple monkey dishwasher, plus something else in addition to it. That seems random, but it makes sense to you. Beware of host emails. Don't click anything as we sort of said earlier. And again to the unsolicited calls and text messages. Sure, here is the text sectioned into appropriate paragraphs:

If ever you're not sure about something being genuine, find the website for that company that is contacting you and call their contact centre. They'll be able to verify to you straight away.

And then finally to cybersecurity, the Wi-Fi and device browsing when you're online. I recently had a member who was a victim of online attack and it was through his local library. He'd connected to the Wi-Fi from his car outside and he thought he was connecting to the genuine Wi-Fi of his library, but it was actually someone else in the area making it appear like it was the library's Internet that he was connecting to. But it was this additional service that was not genuine. So yeah, it's really important.

Yeah. And I think you're right with passphrases coming into play, I'm sure. Was it purple monkey dishwasher? I would have probably gone with Blue Gorilla microwave or something like that. But it is that making it tougher for people to get in.

So if the worst does happens, like with Connie, what should you do if you think you've been been scammed? Yeah, absolutely. So the first thing to do is act fast and report it. Report it to the financial institution that you think has been impacted. So if it was something going out of your AustralianSuper account, call us first. If it was something coming out of your bank, call them first. But ultimately it's about reporting it first and the quicker you do, the easier it is going to be for the financial institutions, me to actually try and protect your account but also recover anything if there has been any funds that have gone out of your account.

As part of that reporting as well is reporting it to police to Scam Watch and the Australian Cybersecurity Centre as well. And then that way the authorities can act as quickly as possible as well. And as I said, we work closely with the authorities as well as much as we can. So yeah, the more information they have and we have, the easier it's going to be for us to help you.

The secondary is change your passwords. So your financial institutions, your bank, your mygov account is another good one to make sure that you're protected on. And obviously you're AustralianSuper online account as well. And then finally, contact ID Care. So ID Care isn't an organisation that a lot of people have heard of, but it's Australian and New Zealand's national identity and cyber support service. They help hold your hand and help instruct you on what to do next and what steps you can take to protect yourself moving forward.

So it's just that common sense approach, like if I lose my house keys, I'm going to change the lock. If someone's got my password, I need to change the password to stop the next one. Now we've talked about the way scammers try and get in touch with us through SMS and email. AustralianSuper, we communicate with members with SMS and email. How can members be comfortable with what they're receiving from us that it is actually from us? Yeah, absolutely. So SMS is will never ask you to click on a link to update your personal information or link through to your account login page. They'll always be something like an update on your account or something that you're either expecting or something that you're not expecting. So if it's something that you're not expecting, that's where it will ask to call us.

The secondary is if you do receive a call from AustralianSuper, even if it's unexpected, our representatives will always clarify who they are, the reason for their call and ensure that you're comfortable to continue before they continue that conversation. And then if you're ever suspicious that a call isn't from AustralianSuper, hang up and call our contact centre. Use the phone number that you find on our website, not the one that you just received in an email or text message, because that's going to be the most secure obviously as well. I can verify that the phone number that you can see on the screen as well is AustralianSuper's phone number. Just for a little bit more Peace of Mind.

OK. And I suppose where we go to from there, and we've covered some of these things is learn more about the various scams, Cat's given us some some insights, but AustralianSuper has a couple of locations on the website shown on the screen here. But the ACCC also has their little black book of scams. Now, what's in their little black book Cat? Yeah, obviously the ACCC is one of the authorities on recent scam trends. So this little black book is essentially a web page that has all of the most recent trends that are being seen. So for every person that reports a scam, the ACCC collates that information and updates their website, which helps keep our members up to date and the general public on what scam trends are being seen. But it's also a great resource for people in my profession as well. So it's, yeah, really valuable to have in your back pocket if you're ever curious as to sort of what's going on in the scam world, other than, of course, our actual website itself.

OK. So again, that that sharing of information, building a bigger database for the authorities to make sure that no one falls victim to the scams because they can recognise them and shut them down. Well, that brings us to the end of the formal part of the presentation. We'll now go to some questions. My colleagues have been answering questions that have been going through and putting some links up in the chat. One question that's come up that's fairly topical, Cat, is about multi, what's it called? Multifunction identification. Now there's been a lot of interest in around that. How is AustralianSuper looking at that? Yeah, good question. Multi factor authentication is what it's called, but I think it's called factor or function depending on which school of thought you belong to. So at AustralianSuper, we take protection of personal information seriously and we have robust security measures in place to safeguard members, accounts and data. These measures do include aspects of multi factor authentication or MFA. It's also sometimes referred to AS2FA. So 2 factor authentification which is where you.

Yeah, one of the more recent enhancements that we've rolled out is in AustralianSuper's mobile app. So we now have the functionality to be used as a authenticator for online portal login, which is using PIN, Touch ID or Face ID. That obviously depends on which how advanced your mobile device is. But then in addition to that we also send real time notifications and we have a stringent security identity check as well process in place. So I definitely encourage if you are concerned about MFA and two FA is use our mobile web app as it does provide that additional security features, which allows you to sort of access your account regularly as well. And that's one of the best things that I can recommend if you are worried about being a scam victim or you're worried about somebody accessing your data, be it on the dark web or if you have recently been a victim of a data breach. Is actively staying on top of your account balances your transactions, whether it's with your AustralianSuper account or your banks or even your mygov account. By actively engaging with those institutions and understanding what your balance is and having a good idea of where you expect it to be, it means that you're more in touch with it. Ultimately, you're the best protection you have against being a victim of scam or if you have had your information leaked on the line.

OK, now one of the questions come up, Cat, is you talked about romance scams. How do they work? How are they? Are they picking on the vulnerable here? Yeah, absolutely. So romance scams, we quite often see members become victims of romance scans because they either receive an email, which was unexpected, but it's sort of, hey, I'm, I saw your profile on social media and I'd like to become friends. And then they slowly win over your trust. So usually it's either via email or it's through social media. So we see it via Instagram and Facebook where, you know, you get a friend request from somebody who you weren't expecting. And then slowly they build trust so they stop showing interest in your life. And then they get you to be interested in their life. And then slowly things start to go wrong with them. We see people who all of a sudden they might not be able to pay their phone bills. So it starts something small and it's usually something that would stop them from talking to you. So it's, oh, I need $50.00 for my phone bill or I can't contact you anymore. And by this stage, you're already sort of engaged with who the other person is, the scammer is. And so you continue to have those conversations. It's like, Oh well, $50, I can give you $50. So we can continue to be friends. And then it's snowballs. So often it'll be some sort of family tragedy. It'll be something to do with, oh, well, I'll come and visit you, but I need $10,000 for the flights and that sort of thing. And these romance scams are quite often the ones that people are the most embarrassed about. We had a member who unfortunately was a victim of a romance scam and lost a significant amount of money. And when they told us, when they let us know, when I was speaking to them, they didn't want to tell me what it was for. They just said, oh, I transferred the money, but you know, I'd like to get it back and how can I help? And it was through the police report. So we work obviously closely with police. And it was through the police that they actually told me the circumstances and how embarrassed they were. And our poor member didn't want to tell his family and friends and that sort of thing because he felt silly. But ultimately it they're very, very sophisticated. They know what they're doing and they know what triggers and leavers to pull for people because they do this every day. It's, yeah, really heartbreaking. But yeah, the more we talk about it, the more people are aware of it, and then hopefully the more people come forward when they have been victims.

Yeah, great. Thanks for that, Cat. Now we've gone through all the questions, so we might just wrap it up there. So thanks Cat for your time and your expertise as a fraud specialist, having the knowledge to help protect our members. Thank you to those that have joined us. I hope and trust that you've received some information that you can put into practise. And finally, thanks to the team behind the scenes being answering questions and popping those links in chat. AustralianSuper does have a number of other webinars you may want to join and you can find that by going to australiansuper.com. So I might see you in the future. Thanks again, Cat, and all the best for the rest of the day, wherever you may be. Thanks a lot.

FY24 End of financial year investment update

Watch a recorded webinar with an update from AustralianSuper experts on our EOFY investment performance to 30 June 2024, and our outlook for future investment markets.

FY24 End of financial year investment update

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Good afternoon and welcome. Thank you for joining us at today's end of financial year investment update webinar. This afternoon we'll be discussing a number of things. We're going to be looking at AustralianSuper's investment performance to 30 June 2024, how we're managing your super in the current market climate, our outlook for Australia and Global economies, as well as investment markets and key things for you to consider when managing your investment choices.

My name is Peter Treseder, I'm an Education Manager and for 25 years I've been helping AustralianSuper members better understand their super so that they can get a better retirement outcome, and I will be your host for this afternoon.

In the spirit of reconciliation AustralianSuper does recognise the traditional custodians of the land of which we work, and we pay our respects to their Elders, past, present and emerging and we extend that respect to all Aboriginal and Torres Strait Islander peoples.

AustralianSuper's head office is on the land of the Wurundjeri people of the Kulin Nation and today I'm talking to you from the land of the Boonwurrung people which is down the south-east area of Melbourne stretching all the way down to South East Gippsland.

What we're talking about today is general information, I do not know your personal circumstances and situations so what we're talking about will be of a general nature. Before making a decision, please consider the information that you need to make a right choice for yourself by reading the Product Disclosure Statement and Target Market Determination.

We will be talking about investment returns so please remember investment returns are not guaranteed, and past performance is not a reliable indicator of future performance.

Now I'm not the only host today I have some experts with me to get down into the nitty-gritty of super. I'm joined by Sam Weaner our Manager of Investment Communications. Amber Rabinov, Head of Macro Research and Strategy and Nicholas Keats one of our Financial Planners. They're all going to help us today. Just a brief intro from each of you. I'll start with you Sam what you do and how do you help members?

Thank you, Peter. I'm Sam Weaner and in my role at AustralianSuper I provide updates to members on our investment strategy as well as the performance of our investment options.

And Amber same question to you.

Hi everyone, I'm Amber Rabinov, I lead a team of highly specialised economists and strategists and together we work to find investable opportunities in asset markets and the broader portfolio in order to help maximise financial outcomes for all of AustralianSuper members in retirement.

And last but not least Nick as a Financial Planner what do you do to help members with their super?

Hello Peter, and hello everyone on the webinar today my name's Nicholas Keats, I'm a salaried employee of AustralianSuper. I'm licensed through a group called Industry Fund Services as an authorised representative providing comprehensive financial planning advice to AustralianSuper members. I've been a Planner for about 20 odd years, and I've been with this group since 2006. I guess planning as a concept is working one-on-one or one-on-two with clients to try and help improve the sense of control and comfort you experience day to-day over your financial affairs and reducing uncertainty into the longer-term future.

Thanks for joining us, now some of you today may have already watched the end of financial performance update presented by Alistair Barker, our Head of Asset Allocation. If you haven't watched it I do suggest you have a look at it to get a broader view of the financial year just gone by. Alistair talked about the positive returns that have been delivered to members over the past 12 months. Now all super funds have a default investment option, that is how your super is invested if you don't make your own investment choice. At AustralianSuper the default investment option is called the balanced option. So, Sam can you take us through the balanced option numbers because the majority of our members are in the balanced option, and we must remember you're going to be presenting two sets of numbers. One for our people in accumulation phase, that's building up their super and what we call super accounts, and one for those in our account-based pension product called Choice Income. Now the performance numbers between these two accounts differ due to the way they’ve been taxed, but Sam how did we get to the numbers we produced this year?

Thank you Peter, so the end of the financial year gives us a great chance to reflect on recent performance and also gain an understanding of what's contributing to member returns. So, over the last year we have seen positive performance from each of AustralianSuper’s investment options. This includes the PreMixed options as well as the DIY mixed options. We'll focus on the balanced option today as well as what's contributed to the balanced options returns. So, for the returns to 30 June 2024 the balanced option for super accounts returned 8.46% for one year with an average annual return of just over 8% over 10 years, and 9.26% per annum since inception back in August 1985. When looking at different time periods it is important to really compare those returns of what those different time periods mean, because each starting point does make a difference. So for example if you look at the 20-year number it looks a little bit lower than some of the others because the 20-year number includes the period of the global financial crisis, which is when listed share markets sold off in 2008 and 2009. Which is a little bit lower than that of the 15-year number. The 15-year number started in the middle of 2009 and this was during some of when the market sold off the most during the global financial crisis. So effectively had a lower base to start which gave it higher performance over that time period. So, it's often beneficial to look behind the numbers to see what's contributing to returns. Now if we turn to the Choice Income option, so this is the balanced option for Choice Income accounts, this is the account-based pension product for those that are in retirement. This option returned 9.25% over one year and 8.83% per annum over 10 years to 30 June 2024. Now the returns for Choice Income often have a higher performance than super options and this is because Australian taxes do not apply to investment earnings, which gives them a benefit. Similar to the super option, the 15-year figure is from the middle of the global financial crisis and then since inception number was from January 2008, which was before the global financial crisis started and includes that downturn during the 2008 and 2009 time period.

Thanks Sam, it's good to see long-term returns continue to be strong. What are some of the factors that contributed to this year's returns?

The biggest contributor to returns over this last financial year has been the performance of listed share markets and this chart shows the daily performance of market indexes over the last financial year and includes Australian shares and international shares. So, the broad market for Australian shares gained over 12% for the whole year, while international shares by rose by just over 19%. The chart also shows how volatile markets can be from a day-to-day basis. So, if you look back a year ago there was a lot of uncertainty around inflation and the level of interest rates, and this led markets to go sideways and even negative during the first part of the financial year. As investors gained more confidence over the year there was a lot of strong corporate earnings that fed higher share prices as the year progressed. So, in the domestic market as an example, banking shares had the most impact with their return making up about half of the 12% return. In international shares the big story was the technology boom this continued to drive markets with significant returns from stocks like NVIDIA, Meta, Alphabet, Amazon and Microsoft. So, when we have seen periods like this before, where technology advances have really led to significant growth and even investment opportunities, in some ways you can liken artificial intelligence as similar to the inventions of the mobile phone and the internet. Each of these inventions led to an increase in productivity gains and even led to higher economic growth over time.

Sam, many members are aware of listed investment sectors such as shares, property, fixed interest and cash. What about unlisted assets, what are they and what impact did they have on our numbers this year?

Yeah, well while the last few years has been an exciting time for listed shares, returns have been a little bit more modest for other asset classes in the portfolio. Over the last year, listed assets were affected by the higher sustained level of interest rates that we've seen in the market and this puts some downward pressure in their valuations. This has meant lower returns for asset classes like infrastructure, property and private equity. Compared to listed markets like Australian shares and international shares over the last year. Now there were some assets in the portfolio that did continue to do well in the current environment, and this included seaports, airports and toll roads. On screen there are just a few examples of some of the investments that are in the portfolio. So, New South Wales ports, Sydney Airport and Transurban Chesapeake are examples of essential public services that we invest in to help grow your super.

Okay Sam, now you've given us the balanced numbers for the default option. How do those numbers compare to our peers?

When investing it's definitely important to compare your performance to a benchmark and for the balanced option its objective is to out outperform the median fund in its peer group over the medium to longer term. This graph shows the balanced option in orange compared to the median return in blue. Over the long term over 10, 15 and 20 years the balance d option has achieved this objective and we've been able to achieve this outperformance largely due to our active management approach to help enhance returns over time.

Now Sam, as someone who speaks to members every day and responds to members questions, one of the questions we're having, and you may be aware of that some members are asking why our performance has lagged behind our peers over recent times. Can you shed some light on this?

Yeah, there's definitely a few factors to consider there. On this chart you'll see that the one and the three-year number, we are slightly below the peer group during that time. At AustralianSuper the reason behind this is we do seek to adjust the asset allocation or the mix of asset classes in the portfolio based on our economic outlook and the valuation of investment markets. So if you look back a year to two years ago, we believed that the chances of an economic slowdown were heightened. There was a lot of news at the time of a potential recession in the US, a potential recession in Australia and in line with that thinking at the time we thought that was going to impact share market performance. So, we positioned many of the PreMixed options including the balanced option more defensively. This meant we had lower exposure to listed shares like international shares and more exposure to defensive assets like fixed interest in the portfolio compared to our peers. So, now what we see is over the last two years, that due to the post-pandemic consumer spending and the technology boom, listed share markets, especially international shares, continue to do really well. So, our lower exposure to those markets compared to our peers ultimately led to a short-term impact to our relative performance. Now currently we do see a reduced likelihood of a significant economic slowdown in the near term. So, since January of this year we have increased our exposure to international shares, which is helping to improve our relative performance compared to peers in recent months.

Thanks Sam. Now as we know and as you have shown each year goes by and produces another number but it's those numbers adding on top of each other through the wonders of compounding interest. Something that Einstein once said was the eighth wonder of the world, and that compounding interest is the key to growth of superannuation accounts. Can you give us an example or show us how these compound returns build our members balance?

Sure, the benefit of investing over time is that your portfolio has the potential to earn income on top of the returns you've already returned in your balance. So much like a snowball picking up momentum as it's rolling down a hill, getting bigger and bigger. So, for example if you invested $100,000 in the balance option 20 years ago and made no additional contributions, over the first nine years you would have actually doubled your money from $100,000 to $200,000 and that's even while navigating the global financial crisis. If you fast forward in another five years you would add another $100,000 and over the course of the full 20 years your balance would have grown to over $450,000. So, while it's never guaranteed, investing over time does provide those opportunities to help build your balance.

Now just quickly to you Nick, as someone else who deals with members every day and they see these ups and downs and they get worried when volatility occurs. What is one of the first things that all members should think about when it comes to their super investments?

Thanks Peter. Look one of the things that I'd say is first to consider is the conflict between what I'd call the now, that is how we internalise short-term returns, particularly the bad ones and the long-term nature of superannuation. So that is your super is likely to be yours into the late 80s or 90s and possibly even longer. We tend to find that the white noise of investment markets in the short term can distract from good decision making over that sort of a time frame. You can see in the slide here for the balanced option at AustralianSuper going back historically. There's been a couple of significant drops including things like the GFC, 15 or 16 years back, COVID-19 of more recent. History does tend to show that markets do bounce back and as a result consistency is certainly our friend. As a current example the market turbulence this last week just gone shows how fast things can change. It does mean that if making a dash for cash, in a flash-crash, is the main driver, then we may well have lost sight of quality well-structured decision-making. Given we sadly can't foresee market returns, it's important to make sure that you invest consistently and for the long-term, to ensure that you don't miss the rising tide when it comes.

Thanks Nick. Now, turning to you Amber. Sam has spoken about improving economic conditions, can you elaborate on this for us and comment on how changing economic conditions here and overseas, may impact investment markets and ultimately member balances?

Sure, well the macro picture which we discussed earlier in the year at our mid financial year update has evolved broadly in line with our expectations. So, if we look at the global picture to start with, inflation has broadly continued to ease in developed markets back towards Central Bank targets of around 2% and you can see this in the left-hand chart on the screen. In broad terms, economic growth has been tracking it around a trend pace. Labor markets have also become more balanced after experiencing tight conditions for the past few years, so that is strong employment growth and record low unemployment rates. Now this picture has evolved in 2024 with a slowing in jobs growth from the very strong pace seen in 2022 through to 2023 and also a gradual nudge higher in unemployment rates as strong population growth has added to the labour supply. Now what this has meant is that it's given many advanced economy central banks including the Bank of Canada, the Swiss National Bank, Sweden's Ricks Bank the ECB and most recently the bank of England, it's given them sufficient confidence to start reducing policy interest rates and you can see this occurring in the right-hand chart on the screen. Now as we forewarned in our February update, this last mile of the normalisation of inflation has been a little bit harder in some economies and this has meant that some central banks have yet to move interest rates lower. In international markets most notable in this category is the US Federal Reserve. Now having said that, following the Fed's most recent meeting in late July, the central bank has started to shift its tone from being highly attentive to inflation risks, to being attentive to both sides of the dual mandate. That is paying equal focus on both sustainable prices growth as well as full employment and Chair Pal has acknowledged that the downside risks to the employment mandate are real. Given that, and following the weaker than expected July jobs report and softening growth and employment outlook, markets are now looking for the Fed to start cutting the funds rate from its September meeting.

Thanks Amber, so you're looking beyond our shores how about a bit closer to home what's the outlook for Australia?

Thanks Peter, so in Australia inflation has lagged trends relative to other developed markets, in part because of the Australian economy's relatively later return to more normal activity after extensive COVID lockdowns. In Q2, headline inflation came in at 3.8% in year-on-year terms and the RBA is not expecting its preferred measure of core inflation to move sustainably back inside its 2-3% target band until late 2025 and into 2026. Moreover, it remains alert to the upside risks to this inflation outlook that is inflation taking even longer to return to target and that's because overall demand in the Australian economy remains stronger than supply. And that concern is likely to persist for a little time longer, particularly given the boost to disposable income coming through via the extraordinary fiscal largesse from both the federal as well as the state governments at the moment. To give some context around this together with the long-heralded stage three tax cuts, the recent cost of living measures across both levels of government adds up to around 1.5% of GDP. We've also seen the resilience of the Australian labour market also continuing, and like in international markets we've seen the unemployment rate slowly rising due to strong population growth. It's now up to a little bit above 4% up from those multi-decade lows in the mid 3.5% range which persisted through mid-22 and into 2023. So, when we put these inflation and labour market stories together, that slow progress on inflation, only moderate easing in labour market indicators, and also that uncertainty around the potential boost to demand from fiscal stimulus, when we put all this together, we continue to expect to have to wait a little bit longer for the RBA to start cutting rates relative to its developed market peers. Now bringing this back to investment markets, the trend for lower policy interest rates will work to lower borrowing costs and support the continuation of growth and the current economic cycle. Interest rate cutting cycles have traditionally been positive for growth-oriented asset classes particularly listed equities and because Australian markets tend to trade in sympathy with global markets, we may see the positive influence of lower global policy rates on our market. Even if the RBA keeps the cash rate here unchanged for now.

Thanks Amber, now going back to our update in February, you mentioned that 2024 was going to be a big year for elections around the world. We've seen some elections come and go, we've seen surprise elections, how are they progressing and what's to come?

Great memory Peter, we did talk about this earlier in the year, around how elections would provide a lot of uncertainty this year, that's certainly been the case as you've mentioned. There was a surprise election for instance in France, a very early election in the UK and even the outcome in India's election was unexpected. So, whilst Prime Minister Modi secured a third term as leader, he governs now from a weakened position without a parliamentary majority. Now, of course all market focus is on the upcoming US presidential election that is set for the 5th of November. This focus has only grown after a series of unpredictable events, including an assassination attempt of former president and current Republican party nominee Donald Trump. Whilst the current Democratic party President Joe Biden he stepped aside as his party's candidate in a very unusual move for his vice president Kamala Harris.

Now our research teams have been spending a lot of time thinking about the macro and the investment market implications of the potential outcome of the US election and it's not only about who gains the presidency, which is important, so to, is the balance of power in Congress. That is in the House and in the Senate, and this is because whilst the President has powers to pass certain rulings such as on tariffs and on foreign policy, when it comes to fiscal policy, so taxation decisions, spending decisions, these need to be legislated or agreed upon by a majority vote in both the House and the Senate. While both a Trump and a Harris presidency are expected to be fiscally expansionary given their respective slates of policy proposals, their macro implications, so what this means for growth, what it means for inflation, what it means for monetary policy, and therefore what it means for investment markets, this is really, really, uncertain. Of course, a Trump presidency would also have significant economic implications for other countries including here at home in Australia, in the event that his tariff proposals are implemented. So, the one certainty that we can take away from this is that at least up until the election result is known, hopefully on the 6th of November, market uncertainty and volatility is going to remain higher than normal.

Thanks Amber, and thanks for running us through what we think may lay ahead. Now to Nick, as a Financial Planner, like me, you talk to members. What are some of the feedback that you're hearing from members around investments and investment choices?

Sure, so look from a Planners perspective Peter, we certainly do deal with clients day-to-day regarding a range of considerations. One of which is indeed investment approach and that sort of flows on more so into discussions around performance and managing risk. As we've seen in this webinar and from returns last financial year, AustralianSuper did finish strongly positive. More broadly much of the feedback in my experience from clients on the ground has been positive given greater than return, greater than expected returns in many areas. We have some clients however that do note, that there appear to be differences in returns from one fund to another. Particularly on the upside last financial year and rightly raised this sort of item for discussion. However, as recently as last week, the discussion changed significantly, again to one of managing volatility and negative runs. Look for mine, I suppose any discussion around performance, up or down is a good thing. It's an opportunity to refocus on why at the client level, we set an investment approach, that's designed to consider things like volatility, set some broad range expectation and identify the time frame for the investor.

Yeah and I suppose it's that objective and expectations that sometimes don't marry up. When you're talking to members, what are the pointers, or the start points for them to consider when choosing their investment options?

Look, there a range of items at the individual level for us to consider, we've listed a few here first of all when we come to compare returns, fund to fund, it's important to ensure we're comparing investment options that are similar in their growth exposure. That is, returns from one fund's default investment option to another can vary considerably based on the level of growth assets held. Now, growth assets are things like shares here, overseas property, infrastructure and so on and these are a big driver of long-term performance. So, small differences in growth allocation can mean a big difference in performance outcomes. Single year returns can also be a distraction, considering that you invest wealth for such a long time. Whilst I'd love big returns every year with no risk, this simply isn't an option, it's a unicorn. A consistency of approach will help manage longer term performance as its time in the market, not timing the market or trying to pick winners, that generally matters most. Sadly, no one tells us what the returns for the financial year will be at the start of the year. Third, understanding investing and performance as an extension is an emotive process that can swing from elation in good time, to panic and bad this has been proven in the week just gone. The emotional ride is a natural response but that needs to be managed by setting and understanding expectations. So, setting a risk theme or an investment approach and sticking to it over time helps to manage emotional swings and does tend to return focus back to the longer-term perspective. And fourth, AustralianSuper as with many funds has a wide range of investment options available for you to pick and choose as desired. You have choice over how you manage your super, be that cautious, aggressive or somewhere in between, so being engaged matters. These options vary in the diversified arena from stable, which is about 35% growth assets, to high growth which is a little over 80% growth assets, to things like sector funds such as Australian or international shares and even to direct stock. It's important to realise that they all have different return objectives and risk levels.

Suppose Nick, it's knowing if I'm the member what my attitude towards risk. In our chat we do have a link to a risk profile calculator that might help you determine, what type of investor you are. Now as a Financial Planner, you provide financial advice, now it's not something that many Australians do. Many Australians take the approach of she'll be right when thinking about their retirement but if members do want advice. How can they get it from AustralianSuper?

To look or to learn more about the options Peter, you can visit the website and initially and probably have a bit of a look through the investment guide, the materials are a terrific place to start. If you need help to work out which option is perhaps best for you, which investment option is best for you, AustralianSuper offer a range of service points to assist. Now, having a look on screen here we can see that the top two cover what I'd say is general and educational material initially. There's a very wide array of information available on the website to help improve both general knowledge and conceptual understanding. On the bottom left we can see the phone-based advice team, this is a team that can help decide the right investment option for you, this type of advice through the phone team comes at no additional cost to you as a member. The bottom right is comprehensive Financial Planners, those are people such as myself and there's 15 or so of me scattered around the country. We deal with investment selection as part of a broader sweat of advice needs and charge for the advice depending on scope, complexity and so on. Now if you're unsure, feel free to contact the fund and seek support and how we can triage your needs and move you to the right person or area to help.

Thanks Nick and if you are interested in learning more about your super there are a range of webinars at different times throughout the year, so you can tune in for them from the comfort of your home or wherever you may be, and you can find more out about those if you go to Australiansuper.com/webinars.

Now, in the chat we have put a link to a survey, which would love you to complete as it helps us tailor these webinars to what you want to know. It also gives you the opportunity to request financial follow up if need be.

That brings us to the end of the presentation part. Questions have been coming in thick and fast, and my colleagues behind the scenes have been answering those feverishly. There’s a couple there that I've been keeping an eye on, that’s a bit of a trend. So, I'll go with those first.

And the first one is to you Nick. I see this a lot. Should I change investment options if I'm moving into retirement? Good question and one that’s raised reasonably frequently. The answer for mine is probably a bit of yes and no. I’d initially want to start by making sure we know what sort of investment option you're in now and what that actually looks and feels like. What's the growth allocation and what sort of risk can we expect from that type of approach.

You often find that changing to a more conservative approach in retirement is considered by many the next logical step. But, we do still need to consider that retirement is a long-term gain. As I mentioned it, possibly 80s or 90s. So, that sort of time frame will impact decision-making, as you still need to weight towards growth assets in some manner to manage wealth productively over that time. On the ground, at a planning level. I tend to find clients normally maintain a fairly consistent or similar approach over time, into retirement in particular. Once we’ve established what sort of approach may suit them.

Thanks, Nick. One for you Amber. You spoke about elections all around the world. How about closer to home and an election in Australia, which I think has got to happen in the next 12 months or so?

Yes, that's right. There’s likely to be a federal election here in Australia by May next year. On this, I can make a couple of broad points. Firstly, Australia's political structure and rules, and this includes compulsory voting and proportional representation, these have a tendency to draw parties to the centre. So what happens here is that we don’t typically see some of the more radical policies that are being proposed elsewhere in the world.

And to this point, thus far there’s little in the way of controversial potential fiscal policies likely to be proposed, such as what we’ve seen for instance in large advanced economies around tariffs or taxes that we’ve seen proposed in France or the US for instance. Another factor to consider is that our markets are also significantly influenced by events on global markets. And so, as we’ve spoken about today markets don’t like uncertainty. And in our mind, It’s hard to see the opportunities for a large policy surprise. So even a large positive policy surprise. Say a kin to the significant deregulatory reforms of the 1980s for instance. It’s hard to see something like this being part of the upcoming election campaigning here.

Thanks, Amber. Now, Sam, I won’t leave you out of the questions here. A question has come in about, you mentioned before AustralianSuper’s balanced option is an active manager. What about indexed investments. What can you tell us about indexed investments? How do they perform short-term, long-term?

A good place to start for that would be basically defining the terms of what they mean. So, with indexing. Indexing is a passive way to invest, where you seek to match a benchmark. So you are seeking to match say the return of the ASX 200 or perhaps the MSCI World Index globally. So, often times passive investing or index investing could come at a lower cost because effectively the cost of setting up indexing is to build out systems to match that benchmark performance. So it’s seeking to match that index.

Where as active investing, you’re basically doing research or hiring investment managers that are picking securities to potentially outperform an index. So it really comes down to, in your own portfolio, determining which approach works for you. And it’s not a one or the other, you can actually have a mix of both types of styles in your portfolio. In AustralianSuper, we do believe in active investing and we have done very well over the long term. Some examples would be our Australian shares option, when you compare the returns of our Australian shares and our security selection approach there and its performance versus the benchmark, we have done very well. It’s also a key part of how our balanced option has performed. If you look over 10, 15, 20 years a large part of our outperformance is due to our active approach.

Thanks, Sam. And look, you touched on one thing there, that you don’t have to have all your eggs in the one basket. When it comes to the investment options available, we have about a dozen different options. You don’t have to be in just one, you can be spread across all of the dozen if you wish.

So, similar question back to you Nick. What are a planner’s thoughts on indexed or active?

Yeah, that’s a good one. Sam has already spoken to the DNA of each. But for a planner's mind I’d be best starting with the question of what level of risk the individual is prepared to accept. Indexed diversified has a strong performance history depending on what sort of time frame you’re referencing. But the nature of that option is to replicate the index. Which means it can be limited somewhat in terms diversification and active management. As it doesn’t necessarily manage the downs or volatility, it tries to replicate a relevant market in some fashion. It’s similar in growth allocation to balanced. There is limited allocation however beyond shares, fixed interest and cash, So in good periods for those assets, particularly around shares, Australian and and international stock, it’ll do very well. If both of those are struggling the downside tends to extend beyond a probably better diversified approach that’s holding some additional sort of active management and diversification. The balanced option does have the benefit of investing in things like unlisted assets, private equity, and infrastructure, which tend to have helped enhance performance overtime. But with that being said we're all different and each different options or combination there of may have its appeal depending on the individual and their needs.

Yeah, you’re right Nick, everyone is different, and we don’t have a one-size-fits-all. This is where that advantage of getting that personal advice can tailor something not only your comfortable with but he's also going to achieve the objective you're asking for.

Back to you Amber, I’m sorry I’ve got to stay on politics. This has come up a few times. What may a Trump presidency mean for returns? I know it’s fairly broad.

And very topical though Peter.

To be clear, we don’t place bets on the outcomes of elections. What we do try and do is research a lot to try and understand what might happen under different outcomes in order to help us manage risk. So, for example Donald Trump has a few key policy proposals that if there enacted would have really big economic impacts. And for example, I spoke previously about his policy proposals on tariffs. So these are a generalised 10% tariff rate on all goods imports into the US. And a 60% import tariff from China. So in insolation, if enacted these tariffs would work to lower economic growth and increase inflation in the US, which isn’t great for equity markets. However, Trump has also promised to cut the corporate tax rate, which would work to improve profitability for businesses, And therefore boost equities. Ultimately, what we should expect if Trump gains office is more volatility in asset markets as Trump works to implement his policy agenda. And noting here that it’s a very different one from the existing Biden policy agenda, and also what Harris is currently campaigning on.

Another couple of questions have come through that I think I can handle at this stage. Is it ever too late to get advice? No it's not. Is it ever too late to get involved in your super? No it isn't. The more you engage in your super the more options you will have. And getting that financial advice is key and also understanding what investment options are available and which of those options are going to best suit you.

I’m going to wrap it up here. We have come to the end of our allotted time. We’ve had many thousands of people join, we’ve had it seems like thousands of questions asked. So, my thanks goes to the team behind the scenes answering those questions as we’ve been going through the webinar. Thanks to you, Sam, Amber, and Nick for giving us your expertise.

Over what we find, or most members find, is the biggest driver of satisfaction with a super fund is how a fund is performing. And thank you for the explanations of what the numbers were, how we got to those numbers, where those numbers may be leading in the future. And certainly, from Nick’s point, how can you get all those numbers to line up to give you the best result.

Apologies if we didn’t get to your question. As I've said we've had thousands of questions coming through we can’t get to all of them.

There’s a lot more information available on the AustralianSuper website, at australiansuper.com across the top of the landing page there are various sections you can select depending on whether your questions continuing on investments, whether it’s on super, whether you’re looking at retirement. We have fact sheets. We have education sessions to help you understand your super a little bit more. So we can give you and this is what we strive to do at AustralianSuper, we want to put you in a better financial place when you do get to retirement whenever that would be. So thank you for giving up your time today. We've enjoyed presenting this to you, hopefully we will see you again next year. And as we've said hindsight is a wonderful thing when it comes to investing. It’s easy to make decisions after something's happened. But it's easier to make better decisions by getting help and advice along the way.

Thank you and have a great afternoon.

End transcript

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