Latest news with #AssociationofSuperannuationFundsofAustralia
AU Financial Review
5 days ago
- Business
- AU Financial Review
Chalmers urged to loosen performance test to get super behind net zero
The peak lobby group for Australia's $4.3 trillion superannuation sector has warned annual performance benchmarking of funds is undermining the net zero transition and other productivity boosting investments. In a paper published ahead of Treasurer Jim Chalmers' three day Economic Reform Roundtable next month, the Association of Superannuation Funds of Australia said its members were sometimes hesitant to invest in areas such as renewable energy because they risked getting a poor performance grade.
Sydney Morning Herald
11-07-2025
- Business
- Sydney Morning Herald
How do I protect my daughters from the ‘motherhood penalty'?
I am a 49-year-old woman who wishes I had done some things differently. I have two beautiful daughters, aged 15 and 18, whom I gave up work to raise for about a decade. My work is in marketing, and I am nowhere near back to where I was when I left. I also haven't had the career opportunities that I believe I would have otherwise. Thank goodness my husband's super is pretty good, but I have very little. My question is: how can I prevent my daughters, if they decide to have children, from being so financially (and professionally) hurt? Kathy Kathy, what you have experienced is known as the motherhood penalty. A 2023 Treasury paper called Children and the Gender Earnings Gap found women's earnings fall by an average of 55 per cent in the first five years after becoming a parent, while men's remain unchanged. This then typically creates a lifetime-earnings shortfall of $1 million, according to the Australia Institute. And because superannuation is earnings-based, it bakes in the disadvantage all the way to retirement. Take a 30-year-old woman on the median wage of around $75,000 – if she has a year off paid work (to work even harder raising a child), her projected super balance at retirement falls from $611,300 to $587,500 – a loss of $23,700, according to the Association of Superannuation Funds of Australia. But that's for just one year away from the workforce. Overall, women who have retired in the past few years have done so with super balances that are 25 per cent less than those of men. So, regarding protecting your daughters, you ask the right question at the very right time (and there are solutions I will come back to for you). The great thing about super is it gives everyone automatic access to compounding, the guaranteed way to wealth. With both your daughter's and your largest earning potential is presumably ahead of you – use the super system to take full advantage. No withdrawals in your working life mean that each year you earn returns on beautiful returns on spectacular returns. And that makes for a powerful phenomenon: the earliest money you save grows the greatest amount. Now, minors can have super funds – you just set one up directly with a super manager, then choose the fund's investment mix – in general, the younger you are, the more investment risk you can afford to take and the more you can theoretically allocate to shares.
The Age
11-07-2025
- Business
- The Age
How do I protect my daughters from the ‘motherhood penalty'?
I am a 49-year-old woman who wishes I had done some things differently. I have two beautiful daughters, aged 15 and 18, whom I gave up work to raise for about a decade. My work is in marketing, and I am nowhere near back to where I was when I left. I also haven't had the career opportunities that I believe I would have otherwise. Thank goodness my husband's super is pretty good, but I have very little. My question is: how can I prevent my daughters, if they decide to have children, from being so financially (and professionally) hurt? Kathy Kathy, what you have experienced is known as the motherhood penalty. A 2023 Treasury paper called Children and the Gender Earnings Gap found women's earnings fall by an average of 55 per cent in the first five years after becoming a parent, while men's remain unchanged. This then typically creates a lifetime-earnings shortfall of $1 million, according to the Australia Institute. And because superannuation is earnings-based, it bakes in the disadvantage all the way to retirement. Take a 30-year-old woman on the median wage of around $75,000 – if she has a year off paid work (to work even harder raising a child), her projected super balance at retirement falls from $611,300 to $587,500 – a loss of $23,700, according to the Association of Superannuation Funds of Australia. But that's for just one year away from the workforce. Overall, women who have retired in the past few years have done so with super balances that are 25 per cent less than those of men. So, regarding protecting your daughters, you ask the right question at the very right time (and there are solutions I will come back to for you). The great thing about super is it gives everyone automatic access to compounding, the guaranteed way to wealth. With both your daughter's and your largest earning potential is presumably ahead of you – use the super system to take full advantage. No withdrawals in your working life mean that each year you earn returns on beautiful returns on spectacular returns. And that makes for a powerful phenomenon: the earliest money you save grows the greatest amount. Now, minors can have super funds – you just set one up directly with a super manager, then choose the fund's investment mix – in general, the younger you are, the more investment risk you can afford to take and the more you can theoretically allocate to shares.
West Australian
27-06-2025
- Business
- West Australian
Australian superannuation investors spared as US drops Section 899 ‘revenge tax'
Australian superannuation investors have been spared from a potentially costly new tax, after the United States confirmed it will withdraw a controversial measure targeting foreign capital from Donald Trump's signature economic legislation. US Treasury Secretary Scott Bessent announced on Friday that Section 899 — dubbed the 'revenge tax' — would be removed from the President's 'Big, Beautiful Bill' following progress on a new G7 tax agreement. Treasurer Jim Chalmers welcomed news of the change, calling it a 'welcome one for Australians and for the Australian business and institutional investor community'. The legislation was framed as a retaliatory response to global minimum tax rules imposed by countries including Australia, as well as digital services taxes like Australia's News Media Bargaining Code. Under Section 899, superannuation funds were facing a rise in the rate of withholding tax from 15 to 35 per cent at a base case and as much as 50 per cent in a more severe scenario that could significantly reduce investment returns. An estimated $450 billion of Australians' cash is invested in the US. The Association of Superannuation Funds of Australia previously estimated the tax could reduce annual returns by 0.1 to 0.26 per cent, depending on how far rates were lifted — a hit that could translate to tens of billions of dollars a year. ASFA welcomed the decision to remove the measure, saying it was a positive outcome for Australian investors. In a statement, the association said the move reflected the importance of international tax stability and fair treatment of long-term institutional investors. It also acknowledged the collaborative dialogue between Australian officials and their US counterparts in helping secure the outcome. 'This is a really welcome step from the US Treasury Secretary and the superannuation sector is monitoring developments closely,' ASFA chief policy officer James Koval said. 'This section of the legislation would have changed the risk return profile of investment in the US, which would have been a poor outcome for all involved.' Mr Chalmers raised the issue directly with Mr Bessent during a phone call earlier this week, warning in public remarks that Australian investors and funds should not be unfairly treated by tax changes in the US. 'We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US,' he said after the meeting. Mr Bessent, in a series of posts on X (formerly Twitter), said the decision followed a new joint understanding with G7 countries on the OECD global tax deal, and praised President Trump for issuing executive orders to defend US tax sovereignty. 'Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration,' Mr Bessent said. While the decision removes a key threat to superannuation earnings, it may complicate Australia's parallel efforts to hold tech giants — which pay relatively little tax on their Australian earnings — to account. Section 899 had also been positioned as a response to digital services taxes, including Australia's News Media Bargaining Code, which required Alphabet and Meta to pay local publishers for content appearing on their platforms. At its peak, the code delivered between $130 million and $200 million a year to Australian media companies. But Meta has since withdrawn from the code, and Google has said it will halt payments to 24 smaller publishers in July. The Albanese Government has flagged it is developing a new framework — referred to as a 'news bargaining incentive' — but no detail has yet been released. That proposed levy may still be in the firing line with Mr Bessent vowing to 'enact tax policies that serve the interests of American businesses and workers'. 'The Trump Administration remains vigilant against all discriminatory and extraterritorial foreign taxes applied against Americans. We will defend our tax sovereignty and resist efforts to create an unlevel playing field for our citizens and companies,' Mr Bessent posted on X. Dr Chalmers said the Government would continue to pursue efforts to fight tax minimisation. 'Australia will continue to engage constructively through the OECD on international tax rules that are fair and ensure multinationals pay their fair share in Australia. 'We'll consider the details of the G7 agreement.'
Perth Now
23-06-2025
- Business
- Perth Now
The annual amount you now need to retire — and it's not $1m
If you're hoping to draw a line under your working life come the new financial year next week — but you're yet to run the numbers on exactly how much money you're likely to splash about each year in retirement — rest easy. The Association of Superannuation Funds of Australia is still doing the heavy lifting for you and reckons a so-called 'comfortable' standard of living will now set couples in their mid-60s back $73,875 a year. For a single, the group's latest quarterly snapshot of the cost of living in retirement, released last week, is $52,383. For comparison, Centrelink's full age pension is currently $43,753 for couples and $29,024 for singles. The cost of a comfortable retirement includes top-level health insurance, fast internet and streaming services, an above-average car, regular leisure activities, occasional restaurant meals, regular wardrobe updates, home repairs or upgrades, annual domestic travel and an overseas trip every seven years. It also assumes the retirees own their own home. When viewed as a total nest egg balance, a couple hoping to live a little and aim for a comfortable retirement will need $690,000. For a single, it's $595,000. But those approaching retirement without any of these magic numbers in their nest egg shouldn't panic. The figures often work in conjunction with supplemental income through a part-pension, and financial advisers also say it's important to remember that annual spending falls as retirees get older. The annual figures are up 1.6 per cent from the March quarter as the higher cost of meat, seafood, fruit and vegetables and electricity offset a near 8 per cent fall in the price of international travel and accommodation as peak season demand waned for trips to Europe in the December holiday period. ASFA chief executive Mary Delahunty said while retirees were enjoying some relief from slowing inflation, essentials costs remained a concern. 'Australians in retirement are starting to benefit from a slowdown in inflation, but the prices of essentials are still rising,' Ms Delahunty said. 'It's a timely reminder that achieving a dignified retirement takes planning, and superannuation plays a critical role in making that possible.' A so-called modest standard of living for retirees now costs $48,184 for couples and $33,386 for singles. That means basic health insurance and limited gap payments, basic mobile, modest internet data allowance, owning a cheaper, older, more basic car, few leisure or travel activities, limited home repairs and keeping a close eye on utility costs. ASFA has been generating its Retirement Standard for two decades. In a sign of the times as homeownership becomes beyond the reach of many people, with an increasing number of Australians likely to be renting in retirement, it has now added budgets for retirees living at the modest level in private rentals to the benchmark guide. It estimates a single renter aged around 65 would need $46,663 a year, with a couple needing $64,259, to retire at a modest level. The lump sums at retirement needed are estimated to be $340,000 for a single and $385,000 for a couple. It said the budgets were significantly above what is provided by the full age pension and highlight the key role superannuation plays for retirees who rent. 'These new figures demonstrate how important it is that we build more homes in this country so Australians can buy a house or an apartment,' Ms Delahunty said.. 'They also illustrate how super can be the difference between hardship and stability later in life, especially for renters, which is why we need to keep it safe for retirement.'
