In this guide
- Pension Loans Scheme rebranded and rate reduced
- 12% Superannuation Guarantee guaranteed
- Super fund merger news
- Super mergers completed
- Australians want to work for longer…
- …but younger Australians not confident about their retirement
- Switching decisions don’t pay off for superannuants
- Superannuation funds and Nukes
Pension Loans Scheme rebranded and rate reduced
The Federal Government is rebranding the Pension Loans Scheme as the Home Equity Access Scheme and reducing the annual interest rate from 4.50% to 3.95% from 1 January 2022.
Minister for Families and Social Services Anne Ruston announced on 15 December, saying “The Home Equity Access Scheme allows Australians over the Age Pension age – whether they are pensioners or self-funded retirees – to unlock this equity using a trusted Government product to boost their disposable income in retirement.”
The Scheme allows older Australians to get a voluntary non-taxable fortnightly loan from the Government up to a maximum value of 150% of the rate of the Age Pension.
To be eligible for the Home Equity Access Scheme, retirees must have reached Age Pension age, own real estate in Australia and meet residency and certain other requirements, but do not need to be receiving a pension payment.
The changes builds on a package of proposed improvements from 1 July 2022, introduced into Parliament earlier in December, to introduce a No Negative Equity Guarantee and allow users of the Scheme to access capped lump sum advance payments.
12% Superannuation Guarantee guaranteed
At an Industry Super Australia event Superannuation Minister Jane Hume confirmed a re-elected Coalition government would lift the super guarantee (SG) rate to 12%, in line with the current legislated schedule.
The SG rate rose from 9.5% to 10% from 1 July 2021, and is due to rise by 0.5% each year until it reaches 12% from 1 July 2025. The SG had risen to 9.5% from July 2014 and subsequent increases were delayed by the Coalition government.
Minister Hume said the government would not unpick the legislated increase or allow a portion to be taken as wages instead, and acknowledged the need to end the tinkering with the super system's fundamentals.
Super fund merger news
There has been a plethora of merger announcements and completions over the past month. Perhaps one of the more interesting is the announcement of a name for the merged QSuper and Sunsuper – Australian Retirement Trust.
If all goes to plan, the merger would create the biggest super fund in Australia at $230 billion. The two funds said their merger was on track to proceed on 28 February next year, pending final board, regulatory and legislative approvals.
UniSuper and Australian Catholic Super have also announced they are exploring a potential merger. UniSuper has over $100 billion in funds under management, while Australian Catholic Super has $10 billion. Australian Catholic Super chair David Hutton said such a merger would provide members with a niche fund and scale. The next stage of any merger would be a heads of agreement (a non-binding agreement setting out key terms and conditions) in the second quarter of next year.
In addition, Hostplus and Statewide Super have signed a Successor Fund Transfer deed which will allow Statewide Super to transfer their members and investments to Hostplus. The combined fund will have $85 billion in funds under management and over 1.5 million members. The funds said the transfer is expected to take place on 1 April 2022.
