BUDGET CHANGES AND SUPERANNUATION
The 2009 – 2010 Federal Budget contains some measures that could affect First Super members’ retirement savings plans. Key points are summarised below. You should consider seeking independent expert advice on how these and other changes in the budget may affect you.

Contribution caps
Concessional contributions are the contributions made to super that attract concessional tax treatment when contributed - for example salary sacrifice contributions.

The cap on concessional contributions has been reduced from $50,000 to $25,000 per financial year and the transitional contribution cap for those over 50 has been reduced from $100,000 to $50,000 for the next 3 years (until 30 June 2012).

The new caps apply to contributions received by super funds after 30 June 2009. If you are also a member of a defined benefit fund special rules apply, and you should ask that fund for more information.

Non-concessional contributions are contributions made to super from after-tax income. The cap will be retained at $150,000 for 2009-10 and will increase when the concessional contribution cap is increased by indexation.

Co-contributions
There is a temporary reduction in the superannuation co-contribution rate for personal contributions made by eligible members over the next five years, as shown below.

Contribution year	Matching rate %	Maximum co-contribution
2009-2010	100	$1,000
2010-2011	100	$1,000
2011-2012	100	$1,000
2012-2013	125	$1,250
2013-2014	125	$1,250
2014-2015	150	$1,500

The co-contribution is already income-tested. For the year to June 30 2009, those earning $30,342 p.a. or less may access the maximum co-contribution. The amount of co-contribution then reduces by 5c for every dollar earned, up to $60,342 p.a. This may change after June 30 2009 due to indexation yet to be announced.

Account-based pensions – drawdown relief extended
The 50% reduction in the minimum drawdown amount that members of income stream products must take this year has been extended for a further 12 months. This means, for example, if your minimum drawdown requirement was 4% of your account balance, it is temporarily reduced to 2%.

Pension access age
From 2017 there will be an increase in the age at which people can access the age pension, as follows:

From:	New age pension age:	Affects people born:	Current age:
1 July 2017	65 years 6 months	1 July 1952 - 31 Dec 1953	55.5 - 57
1 July 2019	66	1 Jan 1954 - 30 Jun 1955	54 - 55.5
1 July 2021	66 years 6 months	1 July 1955 - 31 Dec 1956	52.5 - 54
1 July 2023	67	1 Jan 1957 - onwards	52.5 - younger

The age at which people can access their superannuation (‘preservation age’) is likely to be gradually aligned with the increased age pension age.

Disclaimer: This information was prepared by First Super Pty Ltd (ABN 42 053 498 472 AFSL 223988, RSEL L0003049) drawing on various sources. First Super Pty Ltd is Trustee of the First Super fund (ABN 56 286 625 181). The material in this report has been prepared without taking into account your objectives, financial situation or needs. You should consider the appropriateness of the material in light of your own objectives, financial situation or needs before making a decision. You can obtain a Product Disclosure Statement by contacting the Trustee on 1300 360 98.