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Super SA Changes creating significant opportunities for members

Super SA changes (implemented November 2022) provide exciting tax saving opportunities for its members. For South Australian Government employees, including Doctors, nurses, teachers Super SA has been the compulsory super fund.

The most significant of the Super SA changes is that Triple S members can now roll out to other super funds (such as a SMSF or other industry or retail fund), while still contributing to Triple S. Previously, members could not do this while still a state government employee unless they were over 60 and rolling to a pension account.

Pretty much all other super funds have a $27,500 cap on concessional contributions (deductible or employer contributions) Super SA Triple S on the other hand has no annual concessional contribution cap, but rather a (indexed) lifetime cap of $1,650,000 (2022-23). The ability to now roll out most of your balance out of Triple S each year means you could potentially salary sacrifice longer to Triple S, saving you income tax over your working life.

Another major benefit of being able to roll out of Super SA relates to the way its earnings are taxed. Super SA Triple S is charged a flat tax rate of 15% on concessional contributions and earnings when you withdraw your super (not as you go like other funds). Some other super funds can pay a much lower average rate of tax on earnings due to franking credits and discounts on capital gains when investments are owned for more than one year.

Another great benefit is access to many more investment options. For example in many funds you can buy direct shares, term deposits, ETFs etc. In SMSF (self-managed super funds) you can also buy direct investment properties (residential and commercial), and the SMSF can borrow to purchase the property if required.

Obviously, you need to compare which fund you are moving into and how the investments have performed. For example you could roll to a SMSF and buy a dud investment property which would negatively impact your retirement savings.

Example –

Bob is a Doctor at Flinders and earns $350k including super. His balance in triple S is only $150k but due to a large pay rise he wants to start making contributions of $150k p.a. to his super. (This means he only pays income tax on $200k)

If he contributed this amount, he would reach the (indexed) lifetime cap in around 10-11 years (not including earnings) if you factor in earnings he would reach the lifetime cap much earlier in around 7-8 years missing out on 3 years of significant income tax savings.

This is a complex area so you should seek personal financial advice for your individual circumstances. If we can help in any way, please reach out here.