Queensland Government Employees – Get Set to Celebrate!
-By Nicole Jankovic
From 1 July 2023, the Queensland Government is set to change their commitment to superannuation payments so that saving for retirement is simpler and more flexible across all employee departments.
What is changing?
From 1 July 2023, Accumulation members will receive the equivalent of 12.75% in employer superannuation contributions (police Officers will receive 18%) regardless of their own personal contributions.
Furthermore, both Accumulation and Defined Benefit members will have their superannuation entitlements based on ordinary time earnings (OTE). This means that shift and weekend penalties, as well as all forms of paid leave will all be included as ‘salary’ when the employer calculates superannuation entitlements.
Why is this change important?
This legislation change provides more flexibility, choice and potentially, more money for the employee. That said, there are a few important things to consider once this change takes effect.
There are limits when contributing to superannuation. When employers increase their payments, there is less room for the employee to make personal before tax contributions. Failing to review personal contribution arrangements could result in breaching the limits and potential tax penalties.
More contributions to super should enable employees to have a better retirement outcome. This means it’s a great time to review retirement goals with the view to making retirement dreams a reality.
In addition to the superannuation changes, many Qld Government employees have recently received an increase to their salary. With more income each fortnight perhaps there is an opportunity to boost retirement savings further!
As Accumulation members will no longer be required to make standard contributions to get the 12.75% from Qld Government, perhaps that money could go toward other priorities. With many households feeling the impact of rising living costs, this might be an affordable option.
Importantly Defined Benefit members will still need to maintain standard contributions to ensure retirement savings are maximised.
How will these changes be communicated?
Employees will receive information directly from their employer. The changes will take effect automatically, so no action is required by the employee.
Many workers will experience no change and others will experience a higher superannuation payment. Nobody will receive a lower employer contribution once this change is made.
If I don’t know what to do, who can I talk to?
The For Government website provides information surrounding changes to employee benefits. Alternatively, resources such as MoneySmart provide information on financial advice.
If you would like to look at strategies for making the most of these changes or perhaps you’re ready to start improving your overall financial position, contact your local experienced team at Financial Advice Matters.
Source: https://www.forgov.qld.gov.au/news-events-and-consultation/news/upcoming-superannuation-changes