Investing made simple

Hi everyone. Welcome to today's session on easy ways to boost your super this end of financial year. We've got a really good session for you today. We're going to cover a few things like the stage 3 tax cuts, what you need to know heading into the new financial year for your super as well.

 

So I'm really excited to bring that to you today. My name is Michael Kemplin. I'm an education manager here at Colonial First State. We're very lucky to be joined by our co-presenter, Kim Guest. Kim is a senior technical manager here at Colonial First State.

 

In the first tech team, the first tech team help our advisors when they have service queries for things like super. So we're really lucky to have Kim here to share her insight and share her knowledge as well.

 

So how are you today, Kim? I'm great. How are you? I'm well, thank you. Thanks for asking. Today's presentation, we do aim for it to be around 30 minutes. There are going to be times where we may go over that 30 minute mark.

 

So if you do have to go, that's okay. We'll pop your version of the recording after the session via email. We're also going to have a member of our staff in the chat answering any questions and answers that you put through.

 

Keep in mind that they may not be able to get to every question and we'll do our best to get back to you on those as well.

 

The land on which we're presenting from today is the Gadigal people of the Eora nation.

 

I pay my respects to the Gadigal people that have been here since the day the city was founded and of course for tens and thousands of years prior. Many of you will be dialing in from other areas throughout Australia and as such I also pay my respects to traditional custodians throughout all of Australia, past, present and emerging.

 

Throughout today's presentation it's really important that you keep in mind that anything that we discuss is general in nature and does not take into account your personal circumstances. If you do have any questions regarding your personal financial situation, it will be best to speak to a financial advisor and you can do so through the tool on our website CFS Find an Advisor.

 

Please keep in mind this also applies for any questions that you put in the chat. The answers to those questions will also be general advice and not take into account your personal circumstances. So, Kim, from July 1st, we've all got something to look forward to that's going to impact Australian taxpayers.

 

Can you walk us through what we can expect from July 1st? Yeah, sure. Well, good news for all taxpayers, actually. We've got some tax cuts coming our way. They're called the Stage 3 tax cuts. And you can see on your screen there that we've got the current tax rates that everybody's paying at the moment.

 

And then from the 1st of July, we have some brand new tax rates that apply to everybody. And it means that all of us are going to be paying less tax from the 1st of July this year, which is great news.

 

That is really exciting. Can you give us a few examples of how much less tax people can expect to pay? Yeah sure, well you can see first of all from the graph there that we've got some reductions in the tax rates.

 

So the bottom 19% tax rate, that's going down to 16% and so that means that everybody's going to be paying less tax that has taxable income below that sort of $45,000 range and even if you have taxable income above that, any income below that threshold will get that reduction which is great news.

 

Then the next tax bracket is the 32.5% that goes down to 30% and then the ranges where we pay those higher tax rates of 37 and 45 they're actually increasing from 120 to 135 and from 180 to 190. So all of those changes mean that all tax payers are going to pay less tax from the 1st of July, which is really great.

 

That's very exciting and it's good to see as well that it starts from the lowest tax bracket there, which means that if you're paying any income tax that is, you can expect to pay a little bit less tax there.

 

So look, you can see on that pack there, it did say that the tax cuts are to help with cost of living and we recognise that when it comes to cost of living, times are tough. Ham and cheese croissants, $9 a pop at the moment, coffees have well and truly broken that $5 barrier and I think that we all know everything is more expensive than it used to be.

 

And we do recognise that, but whilst that is the case, we do also have an opportunity to consider the options that are available to us now that we are paying less tax and actually receiving more money in our back pocket.

 

So one thing the first tech have done for us are actually done some calculations on a few of the options that are available to people when it comes to how to use those stage three tax cuts. So Kim, what are the examples that we've calculated here or first tech have calculated for us?

 

Yeah, so what we did is we had a look at those tax cuts and you might have seen on that previous slide, we had a few examples where people were saving, if you're on $100,000, it was over $2,000, the tax cuts, so they were quite significant.

 

And so what first tech did is they had a look at those tax cuts and they said, okay, if you saved just half or approximately half of that tax cut, so for somebody on $100,000, they would save over $2,000.

 

So say they put $1,200 towards some investments and we compared concessional contributions, non-superinvestments and paying down your mortgage to really see which one of those investment options give you the best bang for your buck.

 

And so for concessional contributions, we will certainly get into that in more detail in a moment, but our concessional contributions are just thinking of them as a tax-effective way of contributing to your superannuation.

 

Yep. And so what do we mean by non-superinvestments and paying down the mortgage as well? Yeah, so when you put your money in super, it's investing in things like property, fixed interest, cash, that sort of thing.

 

And then we have those same sorts of investments outside of super, our non-super investments. So for the purposes of this comparison, we've assumed the same kinds of investments inside super or outside super so that we have the same rates of return and we're comparing apples with apples.

 

Thanks Kim. Concessional contributions, that's a word that we use a lot in super and I think that a lot of people can find it a bit confusing and not really know what we mean when we say concessional contributions.

 

So what are concessional contributions? What do we mean by that? Yeah, so concessional contributions are a tax-effective way of contributing to your super. Essentially what they are is you're using before-tax money to contribute to your super annuation fund and it's taxed at 15% on the way in.

 

And if you compare that to other sorts of taxable income which are taxed at your marginal tax rate, if your marginal tax rate is higher than 15%, which for most people it is, that results in a significant tax saving.

 

The difference between your marginal tax rate at 15%, that extra money is going into your super fund and it's going to accumulate and compound over time for your retirement. So that's why it's a really effective way of investing.

 

Okay, it makes sense. So tax concessions, concessional contribution, I guess it's really in the name there. So you can see how with those tax savings you can put more into your super than you would be able to put in other potential investments or other options.

 

But what are some examples of these concessional contributions and what are we talking about there? Yeah, so there's really three main types of concessional contributions. We have super guarantee, which are those compulsory contributions that if you're employed your employer has to make into a super fund.

 

We then have salary sacrifice and that's where you ask your employer to put some of your salary before you actually get it and pay tax on it before tax money goes into your super annuation fund direct from your employer and that's taxed at 15% in most cases.

 

And then we have personal deductible contributions. And personal deductible contributions is where you make... a personal contribution to your super fund, but then the good news is you get to claim a tax deduction for it.

 

So there are some things that you need to think about with that. There's obviously some rules and all sorts of things and you need to lodge a form with your super fund and let them know that you want to claim a tax deduction, but that can be a really effective way of contributing to your super.

 

That's great news. And we do have information on our website about how you can claim those personal deductible contributions as well. And so we've got the compulsory option, what your employer pays and there's two options that are really optional ways of putting money into your super.

 

So a salary sacrifice paid by your employer, personal deductible contributions, I get a tax return on those contributions. So that all makes sense. And look, this 15% is a really effective tax rate and it seems very good.

 

Why do they give us these incentives and what's the purpose of the discount or the lower tax rate, I should say? Yeah, that's right. I mean, it's really to encourage people to put money in their superannuation.

 

So the government offers these tax concessions and says, okay, well, instead of paying tax at your marginal tax rate, you only pay 15%. And that's really to encourage people to go into salary sacrifice and make personal deductible contributions so that they have more money available in retirement.

 

Awesome, makes sense. And look, now we should understand what we mean by concessional contributions and also understand some of the story behind the numbers that we're looking at as well. And before we get into the calculations, it is important to point out that what we're looking at here are estimates that are made based on assumptions that we've made.

 

You can see the assumptions there on the screen to get a feel for what we've taken into account. But reality is always gonna be a little bit different to estimates. So the numbers after 10, 15, and 20 years, they may end up being lower or higher than these amounts.

 

But what's important is that they can give us a good idea or a good estimate as to what we could expect if we considered these three options or used these three options. So Kim, why don't you walk us through what we're looking at here on the screen?

 

Yeah, sure. So what we did is we took somebody who's earning $100,000 and obviously it depends on your taxable income, how much of a tax cut you get. But in this example, we looked at somebody who's earning $100,000.

 

And so they would have got it. a tax cut, well they will get a tax cut from the 1st of July next year of about $2,300 and we've assumed that they put $1,200 or $100 a month of that tax cut towards these kinds of investments.

 

So we know that some of that tax cut they probably need for cost of living but we've just assumed that just over half was put towards some investments. And we compared those three options I talked about.

 

First of all, concessional contributions into superannuation, then investing that money outside of superannuation in nonsuperinvestments like a managed fund. And thirdly, putting that money towards their mortgage because a lot of people are going to be looking at that option because obviously additional mortgage payments help reduce interest costs over time and might shorten the length of that mortgage.

 

So paying into your mortgage is definitely an option people are considering. And so you can see there on the screen we did a projection of after 10 years and after 15 years and after 20 years, what would be the balance of those three options?

 

And interestingly, it was actually concessional contributions. So your salary sacrifice, your personal deductible contributions, those contributions actually ended up with the biggest balance after 10, 15, or 20 years.

 

So you can see that 20 year result there. We got $40,842. And that's just from that little bit of extra money that they're putting into superannuation from their tax cut. Yeah, wow, and you can really see those tax concessions come to life and make that difference there, which is great to see.

 

And there is also a fourth option that's not on the screen here, and that's to spend the money. And so all of the dollar figures there would be zero. And look, that may be the option that is required for you and necessary for you, but I also think it's a good moment to, part of what these tax cuts are is that you receive them and you take home pay.

 

So if you get paid fortnightly or get paid monthly, it's a little bit on top every month or every fortnight. So something that you could potentially budget for and it makes salary sacrifice a potentially effective option if you chose concessional contributions.

 

But look, the dollar figures, and when we look at the dollar figures, it's the maybe the best bang for your buck or highest amount there, but the dollars aren't always gonna tell the whole story because everyone's financial situation, it's gonna be different.

 

And what's best for myself may be different to what's best for someone else. So what are some other considerations that we should take into account when looking at these options? Yeah, that's a good point.

 

Certainly from a dollar point of view, the concessional contributions came ahead, but we need to think about other things such as access to money. So if we're putting, making concessional contributions into super, for most people that means that money is preserved in superannuation for your retirement.

 

So you can't access it before then if you need to. Whereas the alternatives, if you invested it outside of super into non super investments, you might be able to access that if you needed to by cashing down some investments.

 

Or if you put it against your mortgage and it was in an offset account, for example, where you could access that money, then that money is accessible. So, you know, there is things to consider here. If you're going to make it into superannuation, you really need to think that that money is locked away for retirement.

 

Yeah, it makes sense. And it's a pretty significant trade off, of course, you know, putting it into super, not being able to access it for a while. But whilst that is the case, it also may be the best bang for your buck.

 

So those are the sort of options that you need to weigh up when you look at this sort of thing. And look, whilst non super investments in paying down your mortgage are valid options and things that you may be considering, today's presentation is about super.

 

And so what we're going to do is go into a little bit more detail on concessional contributions and how they work, because they do really work on a financial year basis. So as we approach the end of financial year, it's good to understand how they work and what to expect as well.

 

And whilst we have been talking a lot about stage three tax cuts and those sorts of things, concessional contributions are available all the time. You've always got access to them. So understanding how they work, whether we're getting a tax cut or not, we're not going to get everyone every year, unfortunately, but it is good to know how they actually function.

 

So Kim, what are the limits to concessional contributions? Because obviously, you know, there's got to be some limit when it comes to these. That's right. The government has got limits as to how much you can make as a concessional contribution.

 

This financial year, the limit is the annual limit is 27 and a half thousand. And it's important to remember that that limit includes, you know, the compulsory super guarantee contributions made by your employer, as well as any salary sacrifice or personal deductible contributions that you might make.

 

So there's a $27,500 cap per year. The good news is, though, that next year, that's actually increasing to $30,000. So you'll be able to put a bit more in when the stage three tax cuts kick in from the 1st of July this year.

 

And if you want to see how you're tracking against that cap and see how much you've actually contributed, you can log on to myGov on the ATO online portal, and that will show you, you know, what your concessional cap is and how much you've contributed against it.

 

Thanks, Kim. And you can see on the screen there, you know, you may still have room for additional concessional contributions, you know, perhaps most people haven't set up something like a salary sacrifice or made those personal deductible contributions.

 

So there could be some cap and you know, those dollar figures are quite high, you know, $27,500 is a fair bit of money. It doesn't, you also don't have to fill up the cap, you know, and knowing what those limits are is good to keep in mind, but it can be an amount significantly lower than this if you'd like to as well.

 

So with that said, you know, let's say I haven't used the cap for this financial year, a lot of people wouldn't have. Yeah. What happens if I don't use it throughout one financial year? Yeah, well, actually the government's got this really good rule that they brought in a few years ago, where they allow you to use cap amounts from previous financial years in the current financial year.

 

So they actually brought this rule in for people who have some time out of the workforce, for example, perhaps mothers who, you know, don't work for a while while they're looking after babies. And when they returned to the workforce, they thought they should have the opportunity to make additional concessional contributions to catch up, but they should be able to use the unused cap amounts from previous years in the current year.

 

So the way the rule works, you can see on your screen there, we've got five little buckets, and then we've got the sixth bucket for this financial year. The unused amounts of that cap that we haven't used for the five previous years, we can actually use in this year, as long as our total super balance is less than 500,000 on the previous 30 June, then that opportunity is available to us to make a bigger concessional contribution using the unused amounts from previous financial years.

 

I do want to say here though, that there's a lot of things to consider before you make a great big concessional contribution. It really does depend on your financial situation, including your level of taxable income.

 

So you might want some assistance in figuring out, you know, whether this is the right strategy for you from a financial advisor or an accountant, for example. Great, that makes sense. But I know that I've still got one bucket in there from when I was studying full-time and living at home.

 

So I'm hanging onto it by a thread, it was during COVID. So hopefully the time is ticking. I can fill up that bucket before it expires, but it is- By financial years, yeah. Thanks, Kim. It's great to keep in mind, and look, we have covered concessional contributions in really good detail there, and I think we can probably leave it for concessional contributions now, and it is one of two main ways of contributing to Super.

 

The other, of course, being non-concessional contributions. What are non-concessional contributions, and how do they work?

 

Yeah, so non-concessional contributions differ from concessional contributions, because you don't get a concession when you make the contribution.

 

You're actually putting that money into Super from your after-tax income, income that you've already paid tax on, and that goes into the superannuation environment. You don't have to pay any additional tax on the way in.

 

There's no 15% tax as it goes into the Super fund, but also you don't get a deduction when you make that contribution either. And non-concessional contributions are great for moving money into that superannuation environment, because superannuation is very concessionally taxed, so the earnings as you go along on that money is only taxed at a maximum of 15%.

 

instead of your marginal tax rate. So non-concessional contributions can be really effective. Any money you have outside super that you want to put in for your retirement, moving that money into super.

 

Yeah, okay, so even though you don't get those tax concessions, when it's in super, it's treated differently for tax purposes and may end up being more tax effective. Yeah, that's right, it's really the earnings.

 

So those monies are invested and they get earnings, and those earnings are taxed at that lower rate, so it means they compound and grow faster. Awesome, well that makes sense, and look, I'd imagine there are also gonna be some limits when it comes to non-concessional contributions.

 

There is, yes. Can you walk us through what those are as well? Yeah, sure, so for non-concessional contributions, the limit per financial year for the current one, current financial year is $110,000, and the good news is that that's actually increasing next financial year as well to $120,000.

 

So you'll be able to put a bit more non-concessional contributions in if you have that money available. There's also this other interesting rule for non-concessional contributions called the bring forward rule.

 

There's lots of rules with superannuation, but this is actually a really good one. So if you have some money that you wanna put in super, and you wanna put in more than the annual cap of say $110,000, you can actually bring forward the cap amounts for the next two financial years into the current financial year.

 

So for example, you could contribute $330,000 in this financial year, and that's kind of using up the caps for the next two future financial years. Wow, and look, we are looking at some pretty big numbers now, and I know for me personally, I unfortunately don't have $330,000 lying around that I can put into super.

 

What sort of people would really be making use of these rules, and would it be people closer to retirement or who's looking for this? Yeah, I mean, it's a range of people, but it does tend to be people who are approaching retirement, and then perhaps they inherit some money, or they sell an investment property, or a share portfolio for example, and they have some money, and they're really thinking about retirement and wanting to maximise the amount that they have.

 

This is a great way of moving those lump sum amounts into super and waste. That makes sense, and what's true for... is also true for this in the sense that just because the cap is at that limit or at that amount, you don't have to use up the whole cap and you can go under that as well.

 

So that's great to know. And look, I know there are some other benefits to non-concessional contributions. We'd be able to walk us through what those are too. Yeah. Yeah. So not, um, sorry, my mistake.

 

I've jumped the gun there. I'd actually like to ask you whether we've done similar calculations for non-concessional contributions to compare it with our other options. That's right. Yeah. Good question.

 

So, um, when we were doing those calculations and we were comparing, you know, the different options. Um, so remember we had a person who was on taxable income of a hundred thousand dollars and they were investing $1,200 per year into an investment option.

 

We already looked at concessional contributions and non-superinvestments and paying down your mortgage. Now we put that same amount of money into super as a non-concessional contribution so that we could compare what the results are over time.

 

And you can see there in the last column that non-concessional contributions performed really well. After 20 years, we had 32,674, which is a couple of gram more than the non-superannuation investment.

 

And that's really because of that tax-effective environment in super. Because the earnings are just taxed at 15, a maximum of 15% instead of the marginal tax rate, that meant that we have a bit more, a higher balance for our non-concessional contributions than non-superinvestments.

 

But concessional contributions is clearly the winner there. You can see that it got 40,842, which is more than what we got from non-concessionals. And that's really due to the tax-effectiveness of those contributions.

 

Yeah, but of course the limits are much lower into what you can put in there as well. But it's good to see that comparison.

 

And you can really see the tax advantages of the super system coming to life there, which is great to see.

 

And you can tell we're live. So if anyone can think we're pre-recorded now. But if we go into the next session, I know there are some other advantages about putting money or making use of non-concessional contributions.

 

Would you be able to walk us through what those are as well? Yeah, sure. Yeah, so there's a number of advantages, but two main ones. First of all, there's spouse contributions. So you can make non-concessional contributions into your own account or actually into your spouse's account.

 

And that can have the advantage of boosting your spouse's superannuation balance for their retirement. And also you may be able to be eligible for a tax offset, which is really great. So that reduces your tax bill at the end of the day.

 

So if your spouse earns less than $37,000 and you contribute $3,000 into their super account, you actually get a nice tax offset of $540 to reduce your tax bill. So that's a nice incentive to contribute to your spouse's account.

 

That's a really good one. And I know $540. is a larger amount than the $500 in the government co-contribution, but can you talk to us a bit about what that is and why that's an attractive figure? Yeah, sure.

 

Well, the co-contribution is a really good concession as well. So this one is, if you make a non-concessional contribution into your own superannuation account and you're on a lower sort of a middle income sort of range, the government actually gives 50 cents in the dollar co-contribution into your super account.

 

So if I, for example, had a total income of less than $43,445 and I put $1,000 non-concessional contribution into my account, the government is going to put $500 into my superannuation account, which is a 50% return, which is pretty good, isn't it? 50% returns are pretty hard to find, so it's a very valid option. And these are both great options, especially things like spouse contributions, helping out your partner. And when the time comes, hopefully you'll be sharing that pool of money when you retire at the end as well.

 

Look, we've spoken about spouse contribution and government co-contributions, and whilst there's some eligibility criteria here, which means that maybe not everyone can take advantage of these, which is completely fine, but there is one thing that's coming into place from July 1st as well.

 

I think we may have touched on it a little bit earlier. But what's something that all of us can expect that will help us boost super from the start of July 1st? Right. Well, if we're employed, our employer is going to increase the amount of super guarantee that they make into our super account, which is great.

 

So currently, for this financial year, your employer is contributing 11% of your salary into your superannuation account. But going forward from 1st of July this year, that's going to increase to 11.5%.

 

And then the next year, that increases to 12%. So that's a significant savings. It looks like small numbers, but actually that really adds up over time. Absolutely. And that compounding effect can really come into play.

 

And even the 0.5%, if you're on $50,000, for example, that'd be a $250 bonus to your super. And it's going up to 12%. So over the two years, it's really not that longer than one year from now since the second one's coming into place from July 1st next year.

 

So that's a good news story for everyone and an easy way to boost your super as well. So a big question a lot of people will ask as we go through these sessions and we talk about these numbers is how much extra should I contribute to super?

 

And it's a really good opportunity to actually use something like a retirement calculator and you can put in your details and get a feel for the retirement that you're on track for. You can get a feel for the income that you can expect to receive when you retire based on current projections.

 

And when you do that, you can actually see the impact of some of these extra contributions. I know when I did it, it was really powerful and it made me realize that it's a great option for me at my age to potentially give myself the opportunity to retire a few years earlier.

 

So this is a tool that's available for you to take a look at and that was my experience. We may all have different experiences. You might be happy with the numbers that you see, which is is great as well.

 

And that's on our website for you to take a look at. For some people, for a lot of people, but some of the concepts that we discussed were a bit tricky and there can be some details that makes it feel complex and a bit complicated.

 

So there may be people out there that feel like they need financial advice or feel like they could use with help with these sorts of ideas. How could a financial advisor help someone that felt that way?

 

Yeah, sure. So a financial advisor would, you know, look at your personal situation and we've covered a lot of rules at a high level, but there are, as you said, the fine print to make sure that you step through all the hoops.

 

So a financial advisor would familiar with those rules and they can help you work out the right amount of concessional and non-concessional contributions for example. They can determine whether a personal deductible contribution or a salary sacrifice contribution can be effective for your taxes situation and they can also look at other benefits like the ones we talked about today the government co-contribution and whether that would work for you.

 

So a financial advisor just looks at your personal situation but you know if you're comfortable making those decisions yourself then that's completely fine as well. Awesome thank you Kim and that does bring us to the end of today's session as well and we do have on our website a guide to our super contributions that you can use to you know get briefed up on what a lot of what we just spoke about as well.

 

I would encourage you as well if you haven't downloaded the CFS app to do so and to log into the CFS app where you can actually check your contributions. If you're not able to log into the CFS app that might be a good prompt to contact us as well.

 

The number is up on the screen there too 131336 and finally if you are able to would really appreciate any feedback on today's session. We bring these sessions because we're trying to help and equip you with the knowledge that you need for your super to give you a good shot at retiring financial freedom.

 

So please provide your feedback. We'd love to hear from you about any sessions you'd like us to cover in the future as well as what you thought about today's session. So thank you so much for joining us today Kim it was really great having you here today so we hope that you found today's session valuable.

Hi everyone, thank you for coming today. Today's education session is all about responsible investing. My name is Michael Kemplin, I'm an education manager here at Colonial First State. We do these education sessions for our members to help you engage with your super.

 

At the end of the day, members who engage with their super are more likely to have positive retirement outcomes. Today's topic is responsible investing, like I said, and we're very lucky to be joined by Ganit Rana.

 

How are you today Ganit? Very well, thank you. That's good, good to hear. Ganit is a director of responsible investing here at Colonial First State, so she lives and breathes what we're talking about today.

 

And as I said, we're really lucky to have her here because she's going to be able to share some insights and give you an idea of what CFS is approaching responsible investing, what angle we're approaching it from, and how we think about it as well.

 

And what's really important to keep in mind about this session and the reason why we do this session is that this can be quite a complex topic and for some people it can be difficult to understand. And so we really want to peel back those complex ideas and help you understand what companies or super funds like CFS mean when we're talking about responsible investing.

 

And that's really the purpose of today's session. The land that I'm presenting from today, or that we are presenting from today, is the Gadigal people of the Eora nation. The Gadigal people have a literal unbroken connection with the city of Sydney.

 

They've been here since the day the city was founded and, of course, for tens and thousands of years prior. Many of you will be dialing in from the lands of other traditional custodians throughout Australia.

 

And as such, I pay my respects to elders past, present, and emerging throughout all of Australia. It's really important to keep in mind throughout today's presentation we're not able to take into account any of your personal circumstances.

 

And with that said, if you do feel like you'd like financial advice it would be best to speak to a financial advisor. We have a tool on our website called CFS, finds an advisor, and that's available to everyone.

 

You can put in your postcode and find someone near you. So now we'll get started on today's topic and it's really about what responsible investing means to you or what does a responsible investment mean to you?

 

And what I mean by this is responsible investing to myself, I feel relatively strongly about responsible investing. I think it's really important that I have the ability or the option to choose responsible investment options or choose some options that may be more sustainable than others.

 

And I think transparency and the ability to see what I'm investing in or know what I'm investing in is really important to me as an investor. And there may be some people that don't feel as strongly and perhaps they just want to have a minimum standard or feel as though at the very least there's certain things that we're doing to making sure that we're investing your super or your retirement savings responsibly.

 

And that's what today's topic's all about. So as we go through today's presentation, think about it. What does it mean to me? what do these concepts that we're about to go through, how do they apply to my own perspective?

 

And whilst there may not be an option for everyone and some people might have quite specific views, you'll be able to have an understanding as to what these things mean and what we're really talking about.

 

Sorry, Guneet, I did mean to bring you into the conversation here. So what I wanted to ask you is, you're the director, a director of responsible investor investing here at CFS. What does it mean to you or what is a responsible investment from Yeah, when I think of responsible investment, it actually means when we are incorporating certain issues, like there could be some social issues out there, there could be some environmental issues when we are making decisions and managing our members super.

 

And that's really important to us and it's really important to me. That's good to hear. So it's really thinking about some of those real world issues that in applying that to our investment strategy.

 

Yeah. Perfect. With that said, we're gonna take a moment to bring everyone that's watching up to speed with some of these environmental, social and governance factors that Guneet just spoke about. And these really underlie a lot of today's topic and a lot of what we mean when we're talking about some of these ideas and some of these concepts.

 

So we'll start with the E in environmental, social and governance. And this is something a lot of people probably feel quite comfortable with or feel like they know what we're talking about when we mention these letters.

 

And that's climate change, deforestation, energy use, animal welfare, and of course, some other things. We're not gonna spend too much time on environmental because a lot of us probably know what sort of things we're talking about when it comes to it.

 

Next, we have social. Social is thinking about what impact a company has on people. So on the board here, we have health and safety, modern slavery, human rights, and community. It could also be how a company treats its workers or it treats the people within its supply chain.

 

We'll touch on this a little bit later, but think about when you're thinking about social, it's how does this business impact the people? Finally, we have social. have governance. Governance is all about how a business is run.

 

So what are the procedures and processes that they have in place that can help make sure they're doing what they're saying they'll do. So you can think about things like board diversity, executive pay, bribery and corruption, and transparency in accounting.

 

Processes, how can we make sure that a business is run effectively and doing the things it should do? That's governance.

 

Now we're going to get started about talking about a lot of these responsible investing approaches and it's really important you'll see at the top there we've started a bit of a spectrum or we're going to introduce a few ideas.

 

But the place that we start will start is traditional investment. Traditional investments providing limited regard for environmental, social and governance factors and decision making. So providing limited regard for a lot of those things that we just spoke about.

 

Knit, I'd like to ask you the question, what sort of risks are could an investment manager or someone face when they're investing super funds, if they're not taking into account these environmental, social, and governance factors?

 

Yeah, no. At CFS, first I want to say that we really believe that these risks, as you said, ESG risks matter, and they can improve a member's return over a long period of time. So we are very mindful of them.

 

So let me give you an example what could be a social risk. You heard in the media, or maybe it was in the press a few years ago, 7-11. It hit the press because of underpaying some of its employees. It's a social issue, right?

 

So there can be risks out there. So first of all, it impacted their reputation risk. And secondly, it may impact the value of a company. So if you don't incorporate these kind of risks, it can impact the return over a long period of time.

 

And hence we think it's one of our beliefs and we think strongly that we should incorporate it in any kind of decision we're making. That makes a lot of sense. So what you're really saying there is these factors do impact the price and performance of the company.

 

And you look at it from that investment perspective as well. That's really, really interesting and a great point. And that does lead us into ESG integration, which is in many respects the entry level or the starting point for how funds will invest your super, or how someone like CFS will invest your super.

 

So ESG integration is about including those environmental, social and governance factors into decision-making. And that helps manage risks and potentially improve returns. So one of the key things you'll see here is that now we're managing those ESG risks and we're taking them into account.

 

So, you know, I wanted to ask the question, you know, we were on the last slide and perhaps some people listening think, that sounds good, traditionally investing. And maybe I want to focus purely on returns.

 

Do you need to sacrifice returns when it comes to investing in this way? No, I think, I must say, that this is just incorporating these risks. So we're not talking about returns here. What we're talking about, these kind of risks come along.

 

They could be because of climate change, could be some social issues, governance issues, and they could impact a return.

 

So if we manage these risks, they should no way impact a return, they should actually improve your returns over a long period of time.

 

Because if a company we feel manages this risk or a long period of time, it can deliver better return to the shareholder. That makes sense. So it's really about thinking of it. If they're able to manage these risks well, potentially that means they're managing other areas of their business well, and it could create a competitive advantage as well.

 

And I'm sure there's a lot of different ways you could think about these sorts of things, and it can be quite a complex decision making process. So I appreciate that as well. But I think it's important to remember when it comes to these factors, it still is about generating return.

 

And it's still very much at the forefront of your mind, I'm sure, when it comes to these options. Yeah, I think as a fiduciary, the first thing that comes to my mind is how do we deliver that return?

 

Yeah. And that's right on the forefront. And then also making sure that we're taking care of the risk. Thank you, Ginni. That's really good to hear because my money's with CFS as well, so I'm glad to hear that too.

 

And what you might have picked up here is, and as I really mentioned earlier, ESG integration is in many ways that first step into responsible investing and really what you can expect from most super funds when it comes to investing your money, I really want to point out the fact that we are operating on a spectrum, which means that there are some approaches that are in some respects managing risk or avoiding risk, whereas as you move further along the spectrum and more towards sustainability themed investing, you're actually finding things that are looking to generate positive change or produce positive outcomes.

 

And you could really see how for some people they may think, I just want to avoid certain things or not invest in certain things, whereas others may say, I want to invest in the new technology or something that's coming through.

 

A lot of funds will actually, or a lot of investment options will incorporate a number of these approaches. There may be a combination, there may be limited use of some of these approaches, but it's important that this to keep in mind, this is how it's framed or these are some ways to think about.

 

That leads us into screening. So screening, a lot of you may think about when you hear the word screening, screening phone calls. So my manager likes to joke around and say that I screen her phone calls, which I definitely don't do. I'm sure we've all gotten something like that from a family or friend member at some point, a family member or friend I should say. But what screening really is, is applying certain criteria or applying a filter to something to either exclude it or include it.

 

And that's what we're really talking about here and we'll start with an exclusionary or negative screen. So a negative screen is all about avoiding certain things. So it could be avoiding a certain industry. avoiding a company that generates its revenue in a certain way and saying we don't want to invest in things that do this.

 

Next we have a norms based screen. A norms based screen is saying we expect you to meet a certain criteria or a certain level in order for us to invest in you.

 

There's a number of different things but think about signing on to a climate agreement for example. Maybe you wouldn't invest in a company that hasn't signed on to a certain idea or there's a few examples of norms based screening but think minimum standard when we're on there.

 

Next we have positive or best in class screening and even in using screening as an example you can straight away see what we mean by managing and avoiding into actively seeking out or trying to achieve positive outcomes and a best in class or positive screen is really about looking for leaders in their industry or looking for companies that make a great example. are managing some of these ESG risks. An example could be you've got two companies with similar revenues, similar profits, but there's one that's really good at managing the environment around it.

 

Maybe it's very sustainable, plants a lot of trees or something along those lines that would actually make it more attractive from an ESG perspective.

 

That's a very general idea or a very general example, but it gives you an idea of what we're sort of meeting here. So you need screening. Talk to us about CFS and do we have any screens or how do we approach the idea?

 

Now that's really well explained. When we think about screening, I think a start is to say let's not screen anything. We want to be invested in the broader universe. We want to look for opportunities in the broader universe.

 

However, we have a framework at CFS which actually makes us exclude certain companies if we think that's required. So what we exclude today are certain companies and these are, as an example, producers of tobacco.

 

So this would include companies like the Philip Morris, like British American tobacco, and the reason we're excluding them is from a risk point of view. So to your point on your spectrum that you have here, we're looking on the left side of the spectrum.

 

We're trying to avoid it because of the risk that it introduces into the portfolio. There's some others out there. There's another one we have at CFS which is about controversial weapons, things like biological weapons.

 

Sorry, I must say the manufacturers of controversial weapons to be really clear. And this could include companies that manufacture biological weapons, chemical weapons, cluster munitions, and they're all available on our website if you want further details about it.

 

But there's a proper framework. We've applied the framework. We tried to understand it and hence we have come to it. But taking a step back, we generally do not like exclusions in a portfolio. That's great to know.

 

And right there you can see how... a super fund may think about applying something like screens. Gadeet mentioned it's because of potential risks that those companies cause. There could also be for some funds or some investment options an ethical or moral choice.

 

But in this case, that's not what Gadeet was saying. But it may be something to take into account as well for some funds.

 

And just on that point, when you talked about funds using different approaches, there could be a fund which could have an approach of let's take out some companies, exclude certain screens, but also to add some screens.

 

And that's very common nowadays. So I don't think you should only think about taking out the risk. But I think this positive screening is also really impactful. And some of the sustainable funds that you see there are definitely offering that.

 

That's really good to know, and thank you for adding that. And it's important to keep in mind. There is that left side of the spectrum that you mentioned earlier, but those positive screens are just as important.

 

We'll be right back. So, with that said, we're going to move into active ownership, and you may have noticed that active ownership was sort of skipped over. It's because it does sit in between that norms-based screening and positive or best-inclass screening on the spectrum.

 

Now, active ownership is a really interesting topic, and it's something that, in terms of responsible investing, could be one of the more complex areas. So, I'm going to take a moment to explain it to you from this perspective.

 

I don't know about those of you dialing in, but for me personally, the shares that I hold in my super, don't make me a major shareholder at any company. So, I'm not sure about you, Ghanit, but no, I'm not a major shareholder by myself.

 

But if there's a million of me or Ghanit and I together, plus a million, two million other people, all of a sudden, if you add up those smaller pieces together, you can end up in a situation where a fund like CFS may become a relatively major shareholder of a company.

 

And active ownership is really thinking about how the super fund or the major shareholder uses that voice with the company.

 

And so, a lot of people may not know this, but when you hold shares, a lot of those shares comes with voting rights, which means you can actually vote when it comes to making certain decisions within a company.

 

So, we're going to keep this relatively high-level and relatively simple, but when we're talking about the idea of engagement, could you explain or give us a brief example of how a company like CFS might, or a super fund in general, may engage with the company when it comes to active ownership?

 

So, Michael, you explained it really well, combining a lot of members together, and that's safe for us. As a super fund, we can engage with a company, so we can go directly to the company and engage with them on a certain issue, but even more powerful is the case when us as a super fund then combines with some other super funds out there, we call it collaborative engagement.

 

We're collaborating with others, and then go and speak to companies. the case in terms of some strategic issues like climate change or some human right issues or modern slavery issues. We really want to get the message across to that company.

 

So you can imagine the amount of capital sitting behind us then when we talk to that company they listen. And also engagement doesn't happen overnight. It happens over a period of time. So we may engage with a company today, convey a message, then go back to them in six months time again communicate a similar message and go on.

 

But if we hear the company is not responding, where we can actually use our right as a shareholder is when it comes to the annual general elections. And these are those AGMs held once a year and and say if a director is up for election.

 

So then we know that as a shareholder that this director has not been listening, has not taken any action, we can actually use a right and vote against that director. This is when the company really starts listening because they've seen the director has been voted against.

 

The management starts listening, the director's been talking to management, so you can see the impact. And when I told you about the power of not only Superfunds going with all the mumble moneys, but when you go collaboratively, they definitely start listening.

 

That's really interesting, and I think that is what makes active ownership one of the most interesting areas of responsible investment. And I'm sure a lot of you can also think about the idea of members having a voice, and the idea that everyone coming together and having, it just is a very interesting topic, and one that you could spend a lot of time on, but I think it's good for us to move on here.

 

And I just want to add a point, Michael, that it is actually one of our beliefs, that we actually believe that through active ownership, through engagement with those companies by voting, we can actually improve the long-term returns of our members.

 

Of course, and I'm sure in a lot of respects, for a Superfund, it's important to keep in mind they're often long-term investments, and so is it thinking about, when you're talking to companies, ensuring that they're taking a long-term view?

 

Is that part of the idea there as well? Yeah, definitely. It's everything about long-term, right? It's very difficult to see a management respond or change the strategy within six months. It takes a period of time, and that's how we monitor them.

 

Excellent. And in the really dire case, which we haven't applied, but in the really dire case, when even voting doesn't apply, we of course have the final option to divest from the company. We would not do that.

 

We definitely would prefer the route of engagement, but that's the final resort that sits with us. The option is there if it's required. And that's good to know. Thank you, Keneed. We'll continue into now, where it gets, look, we're all the way on the right end of the spectrum here.

 

And I'm sure a lot of people are wondering or thinking about, you know, when it comes to creating positive outcomes or thinking in that way, what sort of options exist? And that's where it comes to things like sustainability-themed investing.

 

So sustainability-themed investing is all about investing in things that create, or, sorry, we just had a little alarm go off in the studio, it's all good, and sustainable-themed investing is all about looking for something that's creating those positive ESG outcomes.

 

So Guneet, talk to us about some examples of sustainability-themed investing. Yeah, I think one classic example of which

 

I'm sure a lot of your members will be hearing about are climate floods. We know climate is a big issue, climate change is a big issue, it's a big risk for us, the number of risks that are coming through because of physical risks, that we all are feeling the floods, the fires, the earthquakes, a lot of transition risks coming through because of changing policy, regulation, a lot of litigation risks, so it's a big issue. So the funds out there now that have decided to launch a climate fund, which is more about investing in solutions.

 

So we know that we need to invest in solutions for the future or to reach to a net zero goal. So there are a lot of funds with solutions out there. They could be just in infrastructure. They could be investing in technology that could be helping out.

 

So I would say climate and climate related funds. They could be some other funds out there. They could be funds on sustainable food. That's another very interesting topic that we've been talking about or been hearing from our managers.

 

If if someone is passionate about saying the future of food, they could be a sustainable food fund, similarly a water fund. So they are really thematic. You know, have a tune. They know what the smaller universe they would be investing in than a broader universe.

 

But I think they're very focused on what they're trying to invest in. That's awesome. And I really like the idea of themes or ideas and really trying to address some of those real world problems, which I guess is what sustainable themed investing is all about, creating positive outcomes.

 

And with that said, I would like to remind everyone as we move along here that when it comes to CFS and our investment options, we do have that baseline level of ESG integration. But for those of for those of you that may be interested in learning more about sustainable options or looking at what is out there in the sense of different themes and different ideas, there is a Thrive Plus fund, which could be a good starting point, which is the Sustainable Growth Fund here at Colonial First State. And it is our sustainable options for those that are thinking about moving in that direction. With that said, we are coming to the key actions here of the slide.

 

So if you are looking to learn more about Thrive Plus, you can visit CFS.com.au forward slash Thrive. I'd encourage everyone and like I said earlier in today's presentation, this is all about helping you engage with your super.

 

And we really. encourage everyone tuning in today to make sure that you are engaging with your super, you know how much you're contributing, you know what your balance is, you know all the things that are related to that and so I'd encourage you to log into the CFS app or whoever your super fund is with and just take a moment to make sure you've got your super sorted.

 

Alongside that you can also get in touch with us if you wanted to change an investment option but more importantly if you just want to check in on your super have a conversation with someone here at CFS you can reach us through 131336 and you can also speak to your employer if you're part of the employer or CFS employer superannuation fund they'll be able to link you to a relationship manager who can also help you with these things so I encourage you to do all those things we also do have a upcoming webinar that you'll receive an email for in May we're going to be doing a stage 3 tax cuts or end of financial year checklist.

 

So you're gonna learn about all those things that you should think about as we head into the new financial year. And a lot of you may not know or maybe you do know, but there are some tax cuts coming in the next financial year.

 

So all of us, hopefully all of us will be paying less tax, which means that you will have more money in your pocket, which means that you could also potentially save more for retirement. So we're gonna dive into what you can actually expect, how much more you may be getting paid, but also what sort of impacts that could have on your retirement in the longterm as well.

 

We really appreciate your feedback. We'd love to hear from you about what you wanna learn about, what you'd like to hear more of, what you thought of today's session. And I encourage you, if you have a moment, to scan the QR code on the screen and please share your thoughts with us.

 

So with that said, thank you so much for joining us today. We really appreciate having you here. And yeah, it was great to hear from you and learn more about responsible investing from your perspective.

 

And I hope all of you tuning in today had a great time. If you do have questions, please feel free to put them in the box. We'll do our best to get back to you with an answer. And thank you so much for tuning in.

 

Thank you. Thanks, Ganine.

Good afternoon everyone and for our members in South Australia, WA and Queensland, half the country, good morning. My name is Jackie Clark and I'm the National Education Manager here at CFS. It's my absolute pleasure to be hosting today's webinar as we celebrate a little bit early, a couple of days early, International Women's Day.

 

Our webinar today will focus on ways we here at CFS can help empower women to take control of their financial futures. I present a similar webinar to this a couple of years ago with you Kelly, who I'll introduce more formally in a moment, but unfortunately not much has changed since then.

 

In fact, the latest government statistics tell us that there is still a 21.7% pay gap between men and women and as our super is tied to the amount of income we earn, the result is a similar gap in our super.

 

In fact, if we use the example of a female age 55, the gap is slightly higher at 23%. So there's many ways for women to close the gap, but it's pretty tough for most people at the moment. We've had 13 interest rate rises, we've got a cost of living crisis, which essentially means everything's gone up, petrol the whole lot, and it's a lot harder for many of us to findextra dollars to put away into super.

 

So with this in mind, the focus of our webinar today will be on what the government and businesses like CFS are doing to help address this gap. I'm today joined by Kelly Power, Chief Executive Officer of CFS Superannuation, Shanaz Waffles from our group executive people and culture, and also Tanya Foster, who is our group executive from finance and fund services.

 

Now before we get started, it is important that we acknowledge the traditional owners of the land that we are on. today.

 

We're broadcasting on Gadigal lands from the Oran Nation. I'd like to pay my respects to elders past, present and emerging.

 

You'll also see our disclaimer coming up on the screen as well. And really what that is all about is to make sure that all the things, all the amazing things you're going to hear today that are general in nature.

 

And if you need personal advice that we recommend that you seek qualified professional assistance. And we'll talk to you about where you can find such professionals towards the end of the session as well.

 

So let's get into it. Kelly, welcome. Thank you for joining us Jack. Thanks for having me again. You're the CEO of CFS

 

Superannuation. What on earth does that all that mean? Yeah, look, thanks again.

 

Hopefully there's some people that have joined us for a second time in a row. And I echo your your concerns, I guess, a year or two on that we haven't really made an impact into the super gap for women.

 

And hopefully we'll get into some of that discussion today and what we can do to really turn that around. So that's one of my key jobs is how do I get better outcomes for the million Australians that trust us with their super and their retirement every day?

 

How do we help them ensure they've got insurance protection if things go wrong in their lives? How do we get the best retirement outcome for all of those individuals? So look after a lot of things that sort of support that, as do my esteemed colleagues here, and that includes investment performance, product design, arranging our insurance arrangements and working with our insurer, et cetera.

 

Two passions for me, the first is around financial literacy and ensuring that we're getting as much help and as much education to as many Australians as we can. We know that one of the key ways you can build a better superannuation balance and better outcomes when you hit retirement is just to know what's going on with your super, just to get informed, get involved.

 

So number one is how do we get that message out? I know as a young person, when I started working, I had absolutely no idea. I had four super funds. I didn't know about consolidation. And this is me, right?

 

Like, so how do we ensure that we're getting the message around those consolidation messages around actually knowing more about your super tomorrow strains? So number one, financial literacy. And the second, which you've touched on, is that that gender super gap.

 

So, you know, 23 percent for pre-retirees. But if you're in that retirement age, it actually goes up to about 33 percent because you haven't seen those women, those older women who didn't start with SG actually have a much broader gap.

 

So again, a superannuation guarantee. So those contributions that your employer will put aside for you. So that only got introduced. I can't remember the year, but some people that are retiring now didn't have the benefit of that their entire life.

 

So so the second point is how do we ensure that we're facing into that and the next generation my three daughters? Don't retire with that same issue in place. So yeah. Yeah. Well and Education, I mean that's something I'm particularly passionate about when you're talking about financial literacy.

 

How does that help? Grow your super balance. Yeah, look I'm gonna set up quite a bit actually because most people think that you have to actually put money into your super in order for It to grow over time and that will make a huge difference If there's one thing I can say if you can afford that you should be doing it even a really small amount Because of compounding interest over time You know the benefits of your investment returns and so for example, you know over 10% year on year Typically is what you'll get that can add up to a lot a really small amount can add up to a lot So that's sort of Tip number one, but education, knowing where your super is, consolidating, knowing how to bring it alltogether so you're not paying multiple fees, knowing about how much you might need in retirement so you can plan towards that, calculators, making sure you're invested in the right options.

 

I mean, all that stuff really can add up to a lot of retirement. So if you know a little bit more about super, you can make more  informed decisions. Absolutely, yeah. And you make perhaps better financial decisions in terms of where your super's gonna head.

 

Yeah, makes a lot of sense. So that's education. What else are we doing in industry? You mentioned the super guarantee.

 

What's happening in that space? Yeah, so superannuation guarantee, as you mentioned, is where your employer puts aside a portion of your pay into a superannuation account.

 

And so finding out which account that's going into, number one, make sure you're in an option or a fund that's a high performing fund. Hopefully all of you as our members are in our options and therefore we've had some really great performance over the past couple of years.

 

But so number one is knowing about that. And so superannuation guarantee will go from 11 to 11.5% as at 30 June this year and then it will go eventually up to 12%. So that's of your pay. So the government has helping you already here.

 

So that's gonna happen automatically? That will happen automatically, yeah. It's almost like a mini pay rise to some degree, isn't it? Can I just say on that, Jack, it is really important that you recognise this as your own money.

 

And so it can feel because it's not going into your pay and sometimes it's not as visible to you that you don't actually, you know, it's kind of this obscure, it's money that's sitting over there, but it's actually your money.

 

This is your retirement savings. In many cases, this will be worth more than your house when you retire. So it's a significant investment. And so yeah, I think recognizing it's your money and taking an interest is super important.

 

So by doing nothing else, the government are actually gonna increase that levy. that'll have the super guarantee that happens this year to 11 and a half and that will obviously grow our final balance.

 

That's right. And I was seeing benefits of compounding too so more money going in now. That returns on the additional amount that goes in that's right. Yeah fantastic. Now you did touch on performance.

 

Do you want to sort of talk to us a little bit about what's been happening at CFS? Yeah look and so as I mentioned we were one of the, I'm my super cohorts into one of the top performing super funds.

 

So if you're joining us through your employer plan that's great news for you. I think we're one of the top three or four in the whole market. So we've really invested a lot in investment performance.

 

We are both through our appointment of Jonathan Armitage who's our new chief investment officer. He started probably not so new now and probably about a year and a bit old that he's been here. So Jonathan Armitage and his team and also through our partnership with BlackRock who are the largest fund manager. in the world and so through both of those things we've got we've had some incredible investment performance and so for us a huge focus getting returns for you our members so that's kind of number one look some of the other things that we've been doing ensuring that our fees remain at some of the cheapest in the entire market so we're very focused on ensuring that we run a very efficient business to keep those fees very low because every dollar that comes out of your super is you know a dollar that you won't have in retirement so for us having very competitive fees is number two and number three which we talked about a little bit is providing education and support so we've invested a lot in upgrading our website ensuring that we can provide tools and calculators to our members we've got pre-retirement calculators we have a partnership with a company that's called retirement essentials where you can work out your entitlement to the age pension so a number of different sort of things that we've done to provide better education and look step one coming to seminars like this so first step tick so yeah ensuring that we're providing that ongoing support to our members now you did touch on earlier and i'm sort of throwing you a bit left field on this one but talking about consolidating your super i just thought that twigged in my mind because that's one way of also reducing fees what do we mean when we're doing that consolidating?

 

Yeah so typically if you have multiple super accounts and the government has made some changes that that avoid this for you know particularly younger generations but some people still may have multiple super accounts and so firstly you know using like the ATO or you can use some of the CFS tools here you can find out where those where that super is and you can consolidate it into one fund look the reason that is beneficial is that typically you'll be paying insurance premiums on both of those so there is default insurance if you're in the my super first choice employer offer you'll get default insurance and so if you have two of those you're paying multiple premiums sometimes there's dollar based fees and you'll be paying two lots of those fees um so there's lots of things to check, make sure you're not giving up insurance that you otherwise might not have in the fund that you're moving to. But on the whole, it's better just to have one fund. Good idea. So we've talked a little bit about what we're doing here at CFS.

 

I think as a large organisation, a big provider of superannuation throughout Australia, we probably have a role, I know we have a role, to play more broadly in terms of giving feedback to government and as an industry collective being involved.

 

And you're very busy already, but you've also taken on a role in the Financial Services Council. Can you tell our members a little bit about who the FSC is? Yeah, so the Financial Services Council is a council that represents a broad number of superannuation funds across the industry.

 

They also have 40% female board membership. Ideally, it would be 50 or higher, but good representation of females and definitely consideration of things like the gender pay gap and the gender super gap as well as a part of the discussion.

 

So what the FSC does is have a direct line into the government and into the opposition around matters that would impact our membership. So my role there is to represent the interests of you, our members, and to ensure that you have a voice with the government and we're getting the best outcome for you.

 

And you're not just a member, you actually have recently been appointed as a board member, so congratulations. Yes, thank you. That's an amazing achievement and something we're really proud of because you are representing the interests of our members.

 

Thank you. All right, let's bring this down to earth a little bit. Three daughters at home, probably keeping you very busy.

 

What advice would you give to them about their super? Oh look, so I can't say that they're all, they all listen to me, so let's just start with that.

 

Let's go for, let's go for the oldest who seems to be the most sensible at the moment. So for my 20-year-old, it really is to understand more about it, so it's about that literacy point. Now she's at a point where she can afford, when she's living at home, off me basically, but she could afford to put more money aside into her super, so she really should.

 

If you can afford it online, I appreciate not everyone can and there's, you know, costs of living pressure is, I hear from our membership, the most significant concern that people have. So I'm not saying everyone can put money aside, but if you can, a little bit does go a long way.

 

And the other is, given she's so young, having a more growth orientated investment allocation, it's really important she can ride those ups and downs in terms of share markets. We know, you know, they they always end up kind of going up if you look kind of at the past performance.

 

So having that asset allocation, I'm standing where her super is taking interest, knowing it's her money, are sort of the key tips that I would give her. And I'm assuming she doesn't have mortgage or too much debt to worry about at this point as well.

 

Absolutely, and I guess the housing is very costly. So she's not actually thinking about saving for a house, she's actually thinking about saving in different ways, saving for her retirement or saving outside of super and shares, et cetera.

 

And again, the same principle, putting a little bit aside because of the impact of the share market over time will have a meaningful impact later on. And when we talk about long-term, for those more growth-orientated investments, we're talking about 10 years plus, but your daughter's probably got 40 plus years.

 

So that's really good advice in terms of making sure that you're in the right investment portfolio. And that is one of the things that when, you think about the word retirement, I talk to my 20-year-old and my 16-year-old, God forbid, about retirement.

 

It's just the blank sort of... But it's your money, like actually, part of your pay is going into this account and eventually that's gonna be really important to you. So at least know where it is and take an interest.

 

Important in terms of making sure at some point in the future, you're gonna have the lifestyle that you want. Yeah, absolutely. Make the decisions and choices rather than being dictated by the government.

 

Absolutely, absolutely. Fantastic, thank you for joining us. No, pleasure. Now, we also have Shanaz joining us. Shanaz, you've been with us for two and a half years, I think now. That's great, exactly.

 

But been in industry a little bit longer than that. I think it's about 20 years. It's a very distinguished career in people and culture. And for those of us who've been around, probably would have been called the old HR.

 

That's right. At one point. I imagine throughout your career that you've seen huge amounts of change, particularly for females in the workplace. Would that be right? That's correct. Thank you, Jackie.

 

And firstly, good morning, everyone. Good morning to all our members. It's great to be here and talking directly to our members. Coming back to your question here, there has been significant changes.

 

And I think it's important, we often forget about the progress we've made. So I want to start by acknowledging that. And some of the recent statistics that have been shared, particularly from the workplace gender equity agency, known as Wigia for short.

 

The first one, which is really encouraging, is there's been a steady increase in female participation. It now stands at 51%. Sp the first time you've got more females in the workforce than males. So that's fantastic.

 

And I think a lot of this has also been as an outcome of government and industry policies. We know we've now got the national paid parental scheme, which is fantastic. We also know that childcare is quite costly.

 

So having government subsidize childcare also helps more women return to the workforce and takes away the burden of paying for childcare. Technology has also played an amazing role in this because we all saw that in COVID in our industry, the majority of us were able to work remotely for extended period of times. and kept connected through technology. So that's enabled us to actually have a lot more flexible work practices, which favors families more broadly, but women especially. And so that's sort of all of the positives.

 

And I want to celebrate that. There is a big but in this. And the but is, the but of the however in this, is that we're still not seeing enough women in senior roles. If I think about boards, we're currently sitting at around 34% of women on boards.

 

And if you look at the last couple of years, it's actually moved very slowly. It's moving very slowly. And if you look at managerial roles more broadly, we have women occupying 42% of leadership roles.

 

Again, given it's 51% in the workforce, that feels low. We've got to get closer to 50. So there's still a lot more to do, but some really good encouraging stats and progress has been made. Well, that's great to hear.

 

It's a step in certainly in the right direction. So we've got. a lot more women, I think that doesn't sound a lot 50 to 51, but it's like another 100,000 women and we've got quite a small population in Australia.

 

So that's positive, but obviously we're still seeing this super gap and one of the reasons you've just highlighted there is because of less women in more senior roles that typically earn more money. There's some other factors that are leading to this sort of gap.

 

Sure, I think you're absolutely right Jackie, women taking time away from the workforce is definitely one factor. The other is if you look at the composition of the workforce, women tend to occupy more of the part-time or casual roles, therefore meaning that they earn less which then flows onto superannuation, so that doesn't help either.

 

On the positive side, we're seeing more employers such as ourselves paying superannuation on parental leave. In fact, I was really encouraged when I looked at the recent Wiguia figures to see there's been a 3% improvement in that stat.

 

So we now have around 86% of employers offering paid parental leave, which is amazing, and paying superannuation on that. So that's fantastic. So that means that women are taking time out of the workforce and not being disadvantaged because back before we had this, when you take time out of the workforce, there was actually no super being paid, andtherefore the gap that Kelly talked about earlier just kept widening.

 

So we're definitely seeing some positive steps there. We also, I mentioned the 51%, you're absolutely right, that sounds like a 1% improvement, but 100,000 more women in the workforce. So that's really encouraging, 100,000 more women earning, and therefore more money flowing onto into superannuation.

 

And so we're not even, but at least being back in the workforce and earning money is going to be contributing to you. So that's really positive there. Now you have mentioned their parental leave, and this one, I still find quite challenging because is it really parental leave or is it still really maternity leave? That's a very interesting question and one that also I might say I'd love to see more being done in that space.

 

We know that whilst workplaces such as ours offer policies for more men or people of all genders to take leave when they have families, the majority of the people taking leave are women. I think it's something like 88% of women versus around 12% of men.

 

So I think that's definitely an issue and we need to solve that. I also think in addition to workplaces doing more this is a broader societal issue. There's still a bit of a stigma around men getting more involved in raising families and I think we as a society need to embrace, encourage, support men to take people of all genders to take a more... active role into being the primary carer. And the other wish I have is we know leaders cast a massive shadow. So I'd love to see more senior men role modelling and perhaps seeing more senior men taking some of these policies up and taking parental leave and that will have a ripple effect that I think will be really positive.

 

Yeah I think it's like anything in life. If you role model and demonstrate it works, we will see that fall in effect. And of course that's a key reason that if women are still the primary people who are taking time out of work, it's the impact on their superannuation.

 

So hence and if only such a small percentage are males who are taking that leave, it's not having the same impact on their super. So there's some great information and insights. Are there other reasons perhaps why women are superbalances potentially are lower than males?

 

I think there's quite a few other reasons as well. I mean one of the reasons as I mentioned earlier is just the nature of the work that people are in. So people coming back to part-time casual work. The other one is around the representation of women in senior leadership roles.

 

So we're still seeing that as being fairly low. So that means women are typically earning less therefore less money flowing into super. So I'd love to see us all doing better and certainly we have targets and aspirations around that to increase the representation of women in senior roles which will then flow on to higher earnings and also higher super.

 

I'm very encouraged by the fact that when you look at universities today the majority of graduates are women. So we're seeing for the first time a lot more women graduating from university and I'd love to think maybe the next generation will be a lot more demanding.

 

We'll do the sort of things that Kelly's been talking about. My experience is they will be much more demanding and therefore I'd love to think the progress will be a lot faster than perhaps what it's been today.

 

Fantastic. So this isn't an advertisement for CFS but I think what I'd love for you to talk to our members about is some of the things that you've implemented since you've come to CFS because I think we do have an important role to demonstrate to the industry more broadly good employment behaviours focusing on women and encouraging women back to the workplace.

 

Can you share some of those changes that you've, positive changes you've made here at CFS? Thanks Jackie and I'm always passionate about our work. So it's always a promo to attract talent and we'd love to get great talent coming to CFS.

 

But some of the ideas we've implemented is firstly I talked about flexible work practices. We're definitely seeing a lot more adoption of that and that is favoring families more generally with women and at CFS we do have hybrid working where we have a combination of people working in the office to keep connections going, keep the collaboration, you know, strengthen our culture but at the same time having time away at home where they can work flexibly.

 

So that's been something we're proud to adopt and we've seen a really good take up. We do pay, in terms of paid parental leave, we actually recently made a change to that. We were very competitive in terms of what we offered but we actually improved our competitiveness and we now offer 16 weeks paid parental leave which I'm really proud of and I think takes us... going forward. The other one I think which is lesser known is not many employers actually pay superannuation on unpaidparental leave so superannuation and paid parental leave is pretty common but sometimes people want to take unpaid leave so for example 16 weeks may not be enough, they may want to take 32 weeks and we actually continue to pay super on unpaid parental leave up to 39 weeks which is actually close to 10 months so we're really making sure that we don't widen that gap we're talking about and we also respect and recognise some people may want to take more time off and how do we support them by paying super.

 

So I'm just going to reflect on that. So you're saying that you're not being paid but we're still giving at the moment 11% of someone's salary before they've gone on leave for up to 10, almost 10 months.

 

Nine and a half months exactly right which is again you know and this is our industry and it's really important we start with our people so that's a benefit we do offer. The other one is again I talked about... child care and how expensive that is so we do offer you know $1,500 bonus when people do come back to work just to help with some of those early costs people have when they're transitioning back into the workforce.

 

The other sort of statistics I'll call out is we do have we've made good progress in terms of our board three out of our eight board members are female and we know we have aspiration to to go higher.

 

When you look at our senior leader population we're sitting at around 43 percent again I'd love to come back next year and say we actually significantly higher and closer to 50 percent but you know I'm very conscious I might sound like a promotional video at CFS and that's something I have been accused of many times because I am passionate about our workplace but on a serious note I do think CFS is an employer we have a obligation we have a responsibility to continue to improve our practices to complete continue to raise the bar and basically be a benchmark that others can either follow and others do it better than us we can follow.

 

So I think there is a responsibility angle there and we continue to continually review our benefits to make sure we remain competitive. And do you think that responsibility actually translates to action?

 

Do you think that does lead to change? If I just hear absolutely and I think you know sometimes the change can be slower than we'd like but there is definitely progress. If I reflect on even our women in senior leadership roles even two years ago we've moved up what is it about six seven percent doesn't sound like a lot but that's in two years.

 

So I'd love to think the next big growth we have will happen a lot sooner. So having a very detailed plan having the initiatives and importantly measuring progress getting feedback from our people along the way and refining it is absolutely critical.

 

Fantastic. Final question for you Shanace. We hear a lot about confidence and female confidence. We've actually done a big research piece here recently at CFS and a lot of the findings which is quite disappointing but understandable is that women lack confidence not only about their financial affairs but also re-entering back into the workforce.

 

So if you've got any tips for some of our members who may be considering coming back to work or even moving into different roles? It's a great question Jack and it's one I do get asked a lot and there's three things I'd say on that.

 

Firstly when you take time out of the workforce it's a great time just to reflect on what is it you really want to do. I know it can be really hectic having a young family often lots of little kids around potentially but it's a really good time to also think about what skills would you like to build and there's some amazing tools LinkedIn Learning other free webinars exactly where you can do it in your own time and perhaps get a new skill.

 

So I'd really encourage people to think about that. The second point I'd make is that stay connected with your workplace, so you know, keep abreast of what's happening, stay connected with your team, look at opportunities that may be available in the workplace, so that way the reentry is a lot more gentle.

 

And probably the third and most important tip I'd give is back yourself. And what I mean by backing yourself, which touches on the confidence item you talked about, is that in all the years I've been interviewing people, I've never seen candidates who have 100% of the capabilities we're asking for.

 

I've really seen examples where it's the perfect time to take that new job. There's always too much going on, it's not the right time, maybe I'll wait. So what I would say there is even if you're ready and you think you've got what it takes, back yourself, put your hand up.

 

I can think of examples even in CFS and in other organizations I've worked in where we've promoted people while they're on parental leave. And then as an organization, our. interest is how do we get the best talent.

 

If the best talent happens to be away and parental leave that's okay. We can find a worker on as we do by putting people acting until they come back and we've had many success stories so I'd really encourage women out there back yourself put your hand up and really go for it and find people who will support you and help you and develop you.

 

Fantastic. I actually took your advice you mentioned that about LinkedIn Learning and I think you've done a couple of online courses and I was quite surprised but I did a bit of a Google search, found some online courses and they were actually free through Harvard of all places so I thought that would look good on my CD, I might put that one on there.

Not that I'm looking for a job. Exactly and the other quick tip I'd say there Jackie is something I do a lot is I often download courses and if I'm in the train or on the plane or wherever I am I can just quickly have a look at it offline and there's some amazing courses on there as you pointed out.

 

Fantastic. Well thank you for your time. Very patiently waiting. Thank you Tanya for joining us today and Group Executive of

 

Finance Fund Services. Shnes and Kelly have mentioned that we've got less women in senior roles.

 

We have even less women in finance type roles across all industries. Tell us a little bit how you got into finance. Look it's a mystery to me because I love finance and have a love of numbers but I appreciate that's a bit daunting for some people and one of the key reasons is that a lot of women don't choose those sort of what they call the STEM programs which is science, technology, engineering and math which end up being those roles that you end up in finance roles or the high-paying roles out in the workforce and that's a real issue for both government and businesses and just to give you a couple of questions. stats, only 37% of women make up those university courses that are called the STEM courses and only 15% of women end up in those STEM qualified roles in large corporate Australia or in government. And so part of the problem that we need to solve is obviously women's confidence and education and choice in  choosing those roles because it has important implications not only for their future earning potential but also the amount of superannuation that they end up having.

 

So with salaries 11% as Kelly mentioned goes into the super guarantee and then it's rising to 12%. So when you look at that gender gap in terms of superannuation balances, if women aren't choosing those STEM and traditionally high paying roles then you end up being lower paid and having lower superannuation balances in the future.

 

So it's a really important problem that we need to solve and I know a lot of schools are encouraging women and trying to build confidence and that sort of confidence then. also stems into financial competence as well, and making the right financial decisions in the future.

 

Yeah, no. Unfortunately, math wasn't my point. I can tell you what percentage of a dress item in no time. No, it's all right.

 

But unfortunately, and I mean, I guess there is a bit of a stigma around some of these subjects that I'm going to be sitting there with my calculator, having to do number crunching all day.

 

Is that what your job is like? No, it is not. I'd like to think my job is very exciting. I've had the opportunity to work in a number of different industries. I've worked in financial services. I've worked in consulting.

 

I've worked in accounting. That might have been at the more drier end of the spectrum. I've worked in agri. I've worked in manufacturing. And now I'm in superannuation. So I've worked in a number of different locations.

 

So while sometimes my days of numbers might be a little bit on the drier end, I do get my variety in the industries that I've been able to work in and obviously crossing industries as well. It's been really positive.

 

I think one of the nice things in finance is that you get the opportunity to have a seat at the table. And I love that. I love that

 

I might be talking about pricing decisions in one meeting or an M&A activity, a mergers and acquisitions activity in the next meeting.

 

I might be challenging the marketing team on their outrageous marketing spend. And so I find that like just really rewarding every day when I come to work. There's always something new and interesting.

 

So I definitely encourage those people out there today that finance is not boring. Trust me. And it's a really rewarding career that is obviously in that STEM category, which gives you the opportunity to grow your wealth and grow your superannuation balances.

 

Fantastic. And I 100 percent agree. I'd love to see what we said. What that's more people, more females graduating from university, but certainly not. I need to talk to them. Go out and do some career counseling out there.

 

We did promise our members as the Head of Finance you would have some budget busting ideas. Do you want to share a few of those with us? I've got a few of them and I've done a little bit of preparation just so I've got my top five here.

 

So the first one is credit cards. They are the work of the devil, right? They do have their place but if you do not make your minimum monthly or you do not repay the amount every month, you do pay quite an exorbitant fee or interest rate which is somewhere in the range of 13 to 20%.

 

So my number one tip is just pay down your credit card balance. If you can't possibly pay it down in that month, pay down as much as you can because it is an expensive form of credit and it's sort of I guess like baseline in finance hygiene would be my advice.

 

In fact, I think on your credit card statement it will actually say how many years it takes to pay off if you are earning your minimum. Yeah, absolutely. It's a lot and you can see how people snowball into credit card debt and go out buying those new shoes, Jackie.

 

It is an expensive form of debt and I appreciate as Kelly raised before, the cost of living. I imagine that people are putting more on their credit cards just to survive but it is important that you take notice of that repayment date every month when your statement comes out.

 

My second tip is the new year review and so every January I write down a list of all of my big expenses and whilst the supermarket might be a big expense for some people, usually the insurances, electricity, phones, streaming services are all really expensive bills that come in and it is amazing if you spend the time to have a look at your insurances and your credit card, not your credit card, your health insurance particularly and all your energy inputs during the month what you might be able to negotiate better rates with different providers and I've saved quite a significant amount of money doing that. It takes a bit of time particularly insurance because you're trying to compare like with like and sometimes you may not get a discount but you might get more benefits particularly on health insurance and your house and contents insurance or even your car insurance.

 

I cannot under emphasize enough to all of our listeners out there that that is a potentially a big saving. My third tip is online grocery shopping like most of us probably don't have a love of the supermarket.

 

I definitely fall in that camp so I've found that online grocery shopping has enabled me to become more disciplined because I do not get lured into the chocolate aisle that we all do when you're probably a working mother or even a mother and you're taking small children to the supermarket and to avoid that tantrum in the aisles.

 

Sometimes there is a few little treats that ended up in your shopping basket which can be more expensive and not necessarily good for your health because it's usually not more atmosphere on the basket.

 

I'm locked into the habit. of giving my children my credit card to do the shopping for me because they're a little bit older. So it's very tough because that is dangerous. I don't get down that road.

 

That comes into tip number five. So this one is not mine, but it's an idea that I've been told about streaming services. We've all probably got multiple streaming services, but still can't find something to watch on TV.

 

And so my advice is obviously to change from like, let's say you're on Netflix, you exhaust your Netflix viewing, then maybe cancel your Netflix for a few months and go on to binge or Stan or one of the others, because that can save you quite a bit of money.

 

I know it was popular to share passwords with other family members for different streaming services, but I think that loophole is gradually being shut. So less of an opportunity there. And my final tip is Kelly mentioned earlier her daughters for saving some money into super when they're young and the benefits of compounding and I absolutely endorse that and one of the ideas is just like when you get a pay rise trying to bank some of that pay rise into your superannuation or even like with the tax benefits that lower tax rates will be implemented from the 1st of July if you can possibly save some of that tax reduced tax expense that all Australians will receive into your superannuation that that is really important as well I appreciate with cost of living pressures that may not be possible but definitely encourage that.

 

I shouldn't forget though checking on your super on a regular basis and this is again part of your financial hygiene because it is really rewarding and I've loved the new CFS app and I regularly embarrassingly get online and look at that balance maybe weekly the markets being particularly good it might be daily because it is quite nice seeing that balance grow and it's quite rewarding because as Kelly mentioned before like sometimes you forget about that this is a significant part of your wealth particularly if you start contributing at a young age and as I pointed out to some of the young adults that live with me that is probably their biggest wealth at the moment because they don't have anything else other than this superannuation balance so they should take an interest right so they are my tips Jackie.

 

Fantastic well I'm going home to check my streaming services because I've got about a thousand of them and still can't find something to watch. You cannot find something to watch. Just one more tip, I know it's not like tannous tips but one additional tip I would consider as well depending on your balance is to get advice and see an advisor I just can't state enough particularly if you you know you can deduct from your super so you can pay from advice from your super there's a great article in Sydney Morning Herald we'll feature it in on the weekend that talks about this in the age and so what you can do is seeing an advisor we know that you're something like 50% more confident like significantly more confident about your retirement savings you feel more comfortable you know how to navigate all of this stuff so we're giving you some you know some tips here but they can actually look at your own situation and give you some help so I really encourage we've got to find an advisor tool on our website I really encourage you if you sort of have the means to do that to go and get some advice particularly if you're in that lead up to retirement.

 

Well on that we're just about at the time I think for today great discussion I do want to just sort of remind everyone that if this will be recorded so you will have access we'll send out the links at this something of interest that you want to sort of recap some of those tips can you talked about that you'll be able to get access to that link we'll have that on our website as well Kelly mentioned our fees our performance and our education tools they're all available on the website as well.

 

And importantly, our find an advisor site. So if you're looking for someone, we've got females, males, regional areas all over the country that work with CFS and they'll be able to help you as well with your super.

 

So look, we really thank you for taking the time. We do have time for, I think, one question and this was actually presubmitted. So I've got that here for all of you actually. So we'll take each one, if you would like to respond.

 

But the question is, considering your roles as female leaders in the finance sector, what's a common challenge you see for women in the industry and what advice would you give to aspiring female leaders in striving to overcome these challenges?

 

Trust me, let's go to you. I think confidence is, and I mentioned it before, I think so many females underplay their successes, underplay what they've achieved and probably just go under the radar a bit in public, like whether it's a meeting at work or just sharing their ideas.

 

And I think that is the most important thing is just being bold enough and give it a go, put your ideas out there. They might not always be listened to, but I think just having that confidence to speak up and contribute no matter what foreign you're inis a really important thing to do.

 

I love that speaking out. Yeah, yeah. Jackie, I probably will just put it, someone wants to put it really succinctly and I love this line, which is along the lines of, do what you love and love what you do.

 

And I'm a firm believer that if you're passionate about something, you're gonna be excellent at it. So we all wanna do things we really love. That's not to say you lose sight of your development needs or don't continue to grow, but if you can channel your energy, find a role, find something to do that really plays to your passion, your strengths, you're gonna be amazing at it and others can help you build the development.

 

And one final thing I'd say is in terms of tools in the system, we also advertise careers at CFS. If anyone's interested in roles, it's also advertising. I'm happy we're going to get a flat out of this.

 

I'm sure we'll get a flat out of this. Love that. So you make it sound very attractive. I would just say making sure you're taking care of yourself. And that can go across a whole different range of areas. I think women can be really hard on themselves. So making sure you're kind of just relaxing, seeing things from, you know, with some perspective. It's going to work out, all that sort of stuff. So taking care of yourself in that regard, taking care of yourself in terms of financial independence.

 

That is, if I can get my kids just to, you know, ensure that they're looking after their own finances, they're financially independent, they're saving for their own future, they know about super, they know about budgeting, et cetera.

 

And take care of yourself in the workplace as well. If you're entitled to something, this goes to Tan's point. Put your hand up inside your cases. No, I'm here. I'm entitled to that. This is something that should be, you know, even all the stuff that Shana has talked about and that we do at CFS, thinking about whether or not those are entitlements to your workplace, etc.

 

And so, yeah, I would just kind of take care of yourself. Yeah, I think women have a very bad habit of putting themselves last on the priority list. So, great advice. We are right on time. Well done, ladies.

 

Well done, Jack. Thank you, Jackie. We're efficient, Jackie. Thank you so much for joining us. We hope you found today's webinar of value and some great tips and ideas. I'd also like to celebrate the role of women in Australian workplaces and wish you all a very happy International Women's Day for, I think, what is it?

 

Friday. Friday, yeah. As I said, all this information will be available on our website and we look forward to you joining us again for our next webinar. Thank you very much. Thank you. Thanks, everyone.

Welcome and good afternoon. My name is Neville Azapati. I am the Executive Director of Retirement for Colonial First Day.

 

Let me start by extending a warm welcome to each of you and members and customers for joining us here today.

 

My role is to lead CFS's efforts in driving a positive experience for all of our members that are preparing for, transitioning to, and living in retirement. Before we start, I would like to acknowledge the Gadigal people of the Eora Nation upon whose land we meet today and pay respect to their elders, past and present.

 

I'm conscious of the fact that you're not in the room with us here today and that you're gathering all over Australia and dialling into this and also wish to pay our respects to the First Nations people in all of the lands in which you're dialling in from today.

 

Now, as you all know, Colonial First Day is one of Australia's largest superannuation funds, but something you may not know is that through our account-based pension, we are one of the largest payers of pensions in Australia outside of the Australian Government.

 

Now, we recognise that retirement is a deeply personal experience and can be a complex one to navigate, not only due to the complexities of Australia's taxation system and their superannuation system, but the emotional journey that comes with making such a big step into retirement.

 

Now, we are always looking for ways to make our retirees and pre-retirees more at ease with this process and so we've been working on a range of different initiatives to help in this regard. We've published an array of educational articles and hopefully you've found some of those on our website to be of help to you.

 

We've recently revised and launched a new retirement calculator just to give you an opportunity to do a little bit of forward planning and we've also been running for some time now a one-on-one retirement consultation call with members of our retirement team that will provide an educational service and a half-hour call that... helps you understand all of the different options available to you in retirement. I'm also excited to say that tomorrow night we're launching a digital application process and a simplified process for entering into the CFS first choice pension product that just makes it a lot easier to move into that pension phase for you.

 

Now I'm a really big believer in arming yourself with knowledge so congratulations to everyone on joining us today and making most of the resources that are available to you. And of course today we're here to talk about the Australian age pension.

 

You know approximately 80% of Australians will qualify at least for a part pension at some stage in their life. So the chances are for you dialing in today and seeing this webinar that this will indeed be relevant to you at some point on your journey.

 

Now, our business partners at Retirement Essentials, and I'll talk about them a little bit more later on in our webinar, have informed us that less than half of Australians apply for their eligibility to Centrelink for their age pension on time.

 

And almost a third of those apply a year later than when they actually become eligible. That's a decision or a delay that could cost you $29,000. We want to make sure that doesn't happen to you today by giving you the right information.

 

So today we aim to arm you with the knowledge to make sure that you get the most out of the Aussie age pension. So here's what we're going to do today. So Kim, who I will give an appropriate introduction in a moment, she's the guru of the two of us and she's going to explain how the age pension works.

 

At the end, we will discuss where you can get some help and a helpful service that we've introduced with our business partners at Retirement Essentials. Then we're going to go through in the last 10 minutes a Q&A.

 

We have received a number of questions. So thank you for those people who have sent questions. And we've tried to prepare clearer sponsors that we will go through at the end of this. Please do feel free to send more questions through that you can do online on the screen there in front of you.

 

If we don't get a chance to get to all of your questions throughout the course of this webinar, we will endeavor to come back

to you in written form and we'll come back to everyone collectively with those questions.

 

So that further ado, let me introduce Kim. Kim is a senior technical manager in Colonial First State's First Tech team, which helps financial advisors with legislative questions and strategies. So what we're basically saying is Kim advises the advisors.

 

So you've certainly got the right person sitting here. Kim also has over 20 years of experience in the financial services industry, including working for Centrelink as a financial information services officer.

 

So clearly, we've got the right person sitting next to us. So over to you, Kim. Thank you, Neville. Hello, everybody, and thanks for joining us on this webinar on the Australian Age Pension. The aim of this webinar is to really give you a good understanding of how the age pension works so that you can then figure out exactly how that's going to fit into your retirement income.

 

As Neville mentioned, the retirement, the age pension is a big part of a lot of people's retirement income. If you're age 67 or more, the majority of people receive the Australian Age Pension. So it is really important that you have a good understanding of how it works.

 

Now, this session is designed whether you're applying for the age pension or you're already receiving the age pension so that you can understand your entitlements and get the most of those concessions.

 

We're going to be answering some important questions such as how does your superannuation affect the Australian Age Pension, and also what kind of concessions could you be entitled to if you get the age pension.

 

As Neville mentioned you can type in any questions that you have along the way in the Q&A box and I'll endeavour to get to them at the end or we will email you with the answers. So let's get started.

 

Okay so we have a disclaimer here and really this is just telling you that I'm doing general information today. I can't unfortunately give you personal information about your situation but I endeavour to certainly explain the rules to you at a general level.

 

Alright so let's look at today's agenda. We're going to start off by looking at the role of the age pension in your retirement income. So usually age pension is part of your retirement income and you'll also get some income from other sources.

 

So we'll briefly cover that and then we'll jump into the age pension in more detail. We'll look at what's the eligibility criteria, how do the income and assets tests work and we'll also look at a case study which looks at you know how the income and assets tests work in a real situation.

 

Then we're going to move on to concessions. What kind of concessions would you be entitled to if you receive the age

pension or even if you don't receive the age pension can you receive some concessions?

 

And finally we're going to look at where to get help. So you may well have questions about how the age pension applies in your situation. So we're going to look at some places where you can get help to answer those specific questions.

 

Okay so let's get started and we'll start off by looking at the role of the age pension in your retirement income. So generally there are several sources of income in retirement. We start off with superannuation.

 

Most people these days have superannuation. They have compulsory super guarantee contributions from their employer and superannuation they may also have made voluntary contributions to boost their superannuation and it's a really important source of retirement income funding.

 

You've got the choice in retirement of taking lump sums or income streams such as an account-based pension or a combination of the two. The next source of income that's really important in retirement is work which might seem a bit counterintuitive since we're talking about retirement haven't you stopped work.

 

But these days a lot of people continue to do work on an ad hoc basis, casual part-time basis and so employment income. is an important source of income in retirement. Then we have savings and so this is non-superannuation savings. 

 

You may have bank accounts, shares, managed funds, funds that are outside of the superannuation environment, then you can then access in retirement to supplement your retirement income. And finally, the reason we're here today, we have the government age pension, which is a really important source of retirement income.

 

We're going to have a look today at how much the age pension is and how the income and assets tests work, but I guess it's important to know that you may not receive the maximum age pension because under the income and assets tests, your entitlements might be reduced.

 

And those other sources of income that we just spoke about, superannuation, employment income, savings, may all affect your rate of age pension under the income and assets tests. The good news though is if the balance of those things start to reduce over time, that may mean that your rate of age pension increases because you have less income and assets.

 

So you're always guaranteed a minimum amount of retirement income. Thank you. Okay. So we're all important, how much is the maximum age pension? Yeah, that's a big question, isn't it? The maximum age pension, so if you're a single person, the maximum age pension is $29,023.80 per year, so $1,116.30 per fortnight.

 

If you're a member of a couple and both of you are entitled to the age pension, then you'll get a combined amount. The maximum you can get is $1,682.80 per fortnight, which is $43,752.80 per fortnight.

 

So that sounds quite good, that's quite a decent amount of pension, but you're probably asking yourself, is that enough to live on in retirement? We have this thing called the ASFA retirement standard, and ASFA is this organisation that puts out this retirement standard, which estimates how much income you need in retirement to have a modest retirement or comfortable retirement.

 

And if we have a look at the ASFA figures as to how much income you need, you'll see that they're a little bit more than the age pension. Even if you want a modest retirement, the amount that you need if you're a single person is $32,665, and that's a bit more than the age, even the maximum age pension of $29,023.80.

 

So the age pension alone is not enough for a modest retirement. For a couple, you need $46,994.28 per year, and the maximum age pension you can get is $43,752. So again, the age pension alone is not enough to have a modest retirement income, and you're going to need some income from other sources to supplement your retirement income.

 

So Kim, when can we actually start to apply for the age pension? That's a very good question. So we're going to jump into the eligibility in a moment. But the important thing to know here is that you can actually put in your application for the age pension before you're eligible.

 

So up to 13 weeks before you reach age pension age, you can put in your application with Centrelink, and that gives Centrelink a bit of time to process that application. you a better chance of your payments kicking off as soon as you're eligible.

 

Fantastic. Okay so let's move on to qualifying for the age pension and it's really quite simple the qualification criteria for the age pension. There's just two main criteria. First is you need to be age pension age and age pension age now is quite simple it's age 67.

 

We used to have some quite complex rules that were based on your date of birth and it could be anywhere between 65 and 67 but since 1 July last year it's just a flat 67 so everybody needs to reach age 67 to get the age pension.

 

The second eligibility criteria is residency. You have to be an Australian resident to receive the age pension and you have to have at least 10 years of Australian residents and at least five years of that 10 years has to have been continuous.

 

And by Australian resident I mean you're an Australian citizen, you're a holder of a permanent resident visa or you're on one of these special category visas because you're from New Zealand. There are some other complex rules there.

 

So if you don't meet that criteria, you probably want to have a chat to Centrelink and see if you qualify, but those are the basic criteria. Now, Kim, I know I mentioned in the intro that a number of people apply too late.

 

And you know, you said some people even up to a year. Yeah, it's a big problem. Is there any back pay like you want to do apply? Is it retrospective? It would be great if there was, but unfortunately no.

 

So you only get paid the age pension from the date that you lodge a claim and you're eligible. So if you delay putting in that application for quite a period of time, which a lot of people do, they actually miss out on that age pension.

 

So it's really important that 13 weeks sort of timeframe before you turn 67, good time to use that timeframe. Exactly. Yeah, very important. Okay. So let's move on now to how much age pension will you actually receive?

 

So we looked at the maximum age pension, but you may not receive the maximum because of these income and assets tests that apply. So what Centrelink do is they look at your income and they look at your assets and they apply the tests and whichever test gives you the lowest rate of age pension, that's the one that applies to you.

 

So we'll start off by looking at, well, what is income for Centrelink purposes and what is assets for these tests? If we look at income, first of all, there's quite a few sources of income that they assess, but the main two are employment income.

 

So if you've got some part-time or even ad hoc casual work, that employment income will count as income under the income test. But we do have this lovely thing called the work bonus that we're gonna talk about in a minute, which does offset that employment income to some degree, which is great.

 

And then we have deemed income from financial investments. And it's really interesting how Centrelink assess income from financial investments. They don't look at what those investments actually earn because that would be a lot of work to everybody's individual investments, to track exactly what earnings they're getting.

 

So what they do is they just deem that it earns a certain rate of income. And those deeming rates are currently 0.25% and... 2.25%, so quite low at the moment. And so those deeming rates, they apply to financial investments, such as bank accounts, shares, managed funds, an account-based pension, which is a superannuation income stream, or even any money you have in superannuation if you're over age pension age.

 

So that's what's accessible income under the income test. What about the assets test? You'll see there that I've listed things such as bank accounts, shares, managed funds. They look very similar to the same things that I had from income, but this time we're looking at the account balance.

 

How much have you actually got invested in those? They're assets under the assets test for central engage pension purposes. They even count your household contents and your cars. But a little tip there with the household contents is it's not the insurance value.

 

It's actually the garage sale or market value first. So it's probably $10,000 or less for those household contents. Don't write down the insurance value, which might be more like $70,000 or $80,000. So, yeah, a lot of different assets count under the assets test, but importantly, your home, your family home, if you own a family home, does not count under the assets test.

 

Now, that was a lot to take in. I've mentioned for people at home wondering, what's this DME, how does it apply to me?

 

You're going to take us through a case study later on. Yes, I am. Great. So, if you haven't got all that yet, we are going to go through a case study.

 

Now, I've got a question for you, Kim. I'm sure everyone's wondering, you know, do I qualify, you know, how's it going to apply to me? Can you take us through all the qualification thresholds? Yes, certainly.

 

All right. I'm glad you asked, because here we go on the next slide, is the income test. And under the income test, they look  at a base rate. So, if you have income below $204 a fortnight, you will receive the maximum age pension under the income test if you're a single person.

 

But if you have income over $204 a fortnight, it starts to reduce your age pension, and it cuts out altogether if you have income of $2436.80 per fortnight, which is $63,351.60 a year if you're a single person.

 

So, that gives you an idea if you're a single person and your accessible income is below $63,000, you're probably entitled to at least a part age pension. For couples, if you're a member of a couple, what they do is they actually look at the combined income of the couple.

 

So, it's not just the person who's getting the age pension if just one of you is getting it. It's actually always the combined income of the couple. And what they do is they say, okay, if you've got income combined of less than $360 a fortnight, that's fine.

 

You can get the maximum age pension under the income test. But if your combined income exceeds $96,865.60 per year, you receive no age pension. And if it's somewhere in between $360 and $3725, you'll receive a part age pension.

 

So, it's a calculated amount. So, a lot of people are surprised that that threshold's actually reasonably high, isn't it? So, for a couple, you can have up to $96,000 and still receive a part age pension per annum.

 

So, a lot of times people think they're not eligible for the age pension. but they actually may be eligible for at least a part pension. Okay so just thinking more about the income test I mentioned before that if you're working if you're doing a bit of part-time or casual work that employment income counts under the income test but there is this great thing called a work bonus that Centrelink give you which actually offsets employment income and results in less income being accessible under the income test.

 

So up to $300 a fortnight of employment income is offset by this lovely thing called the work bonus and you can even accumulate unused amounts of work bonus from previous fortnight's to offset future income which is great and when you first start off on the age pension they give you $4,000 in the work bonus income banks who offset any future employment income.

 

So I guess the numbers aren't that important but the important message here is you might think I'm still working I can't get the age pension but you might be able to due to the work bonus. Fantastic.

 

And I know you'll cover that off in a case study in a moment. Now, Kim, I know you're going to take us through the asset thresholds and cutoffs through the asset test as well. Now, one of my colleagues, Craig, he always says to me, I'm a little bit amazed by this, that he reminds me that a couple could have more than a million dollars, up to more than a million dollars outside the family home and still qualify for the age pension as a couple.

 

Is that right? Yeah, that's right. Yeah. So you would only get a very small part age pension if you had a million dollars, but you would get a part age pension. So a lot of people are surprised that you can actually have quite a high level of assets outside of the family home and still get some age pension.

 

That's why I guess, as I've seen before, up to about 80% of Australians at some point in their life, particularly, I guess, as those assets sort of start to depreciate over time and they start to spend them, they might become eligible.

 

That's right. So quite a lot of people might not initially be eligible when they get to 67, but at a future time they might be.

 

Yeah. Why don't you take us through the assets test then? Okay, the assets test.

 

So if we start off by looking at single people, different thresholds apply depending on whether you're a homeowner or a nonhome owner. If we start off with a single person who owns their own home, you can have other assets apart from the home of $301,750 and you'll receive the maximum age pension under the assets test.

 

If you have assets exceeding 301,750, your pension starts to reduce until it gets to 674,000 and then there's a cutoff there for a single homeowner. If we look at a non-home owner who is a single person, their asset thresholds are actually a bit higher.

 

They can have 543,750 in assets and get the maximum age pension and if they have assets exceeding that, it starts to reduce until they get to 916,000. A couple homeowners, which we were just talking about, they of course the home itself doesn't count as an asset, but they can have other assets of up up to 451,500 and still get the maximum age pension.

 

If they have other assets exceeding that threshold, it starts to reduce until they get to a million and 12,000. And that's when the age pension cuts off. So that's where that million dollar figure comes from.

 

And yes. Now Kim, you mentioned before your own home, your primary residence doesn't count towards this asset test. Now

 

I'm conscious of the fact the last 10, 20 years, property prices have gone through the roof.

 

Yeah. Is there no cap on the value of the primary home? No, the good news is there's no cap. So even if you've got a house that's worth quite a bit of money, it doesn't count as an asset under the age pension asset test, which is good news.

 

Yep. And just finally we've got a couple non-home owners there and you can see the thresholds are a little bit higher if you don't own your home. You can get the maximum pension if you have assets of up to 693,500 and it cuts off altogether at $1,254,500.

 

We'll be right back. Okay so that's our assets test. And now how does it work in practice? Now how does it work in practice? 

 

So we've got a nice little case study here, we've got Steve and Leanne and Steve and Leanne they're both approaching age 67 and looking to apply for the age pension.

 

Now Steve's still working part-time, he's earning $250 a fortnight and they've got some other assets, you know they've got home contents of $10,000, car, bank account and they've got some account-based pensions from their total assets are $480,000.

 

So let's now look at the income test and the assets test and have a look at how much age pension that Steve and Leanne are eligible for. If we start off with the income test, actually Steve's employment income is not impacting them under the income test and that's because of that lovely work bonus which offsets up to $300 a fortnight and he's only earning $250 so his employment income doesn't reduce their age pension at all.

 

So let me get this right Kim, I take the suit and tie off, I've retired, I can go and get a part-time job at Bunnings on the weekend, earn up to $300 and that's not going to impact. That's right, doesn't impact your age pension at all.

 

Only problem is that is I have no place to be giving anyone advice on hardware and tools so I'll leave that to the experts.

 

Okay well that's probably a good thing to do. The other thing that we have under the income test is deemed income on your financial investments.

 

So for Steve and Leanne they had $50,000 in the bank, they had those account-based pensions of $400,000 so that's $450,000 of financial investments that Centrelink apply those deeming rates of 0.25 and 2.25% to.

 

After you do that there's a little calculations that comes out to be $8,121. So that's quite a bit of income and you might think that would reduce their entitlements under the income test but no it doesn't.

 

It's actually below the threshold of $360 a fortnight and so they actually get the maximum wage pension under the income test. Now we also have to apply the assets test and their total assets assets we can see there are 480,000.

 

Now they actually do exceed the threshold, the lower threshold for couple homeowners. So that threshold's 451,500. So they're just a little bit above. And so they're getting just a little bit of a reduction to their age pension.

 

They're gonna get 41,530 per annum of age pension combined, which is a bit below the maximum, which is about 43,000.

 

So we applied both the income test and the asset test, and we take the lower of the two.

 

That's right. So Steve and Leanne in this case are affected by the assets test. Yep. Thank you. Okay, so that's how it works in practice, but I think you've got a calculator, haven't we, on our website that they can actually put their details in and do these calculations to get an idea of your situation.

 

That's right. Yeah. Okay, so if we move on, now this is a part that people are usually pretty interested in, and this is, if you get the age pension, what kind of concessions are you also entitled to?

 

And so the good news is that everybody automatically, if you're on the age pension, gets this lovely thing called a pensioner concession card. And the pensioner concession card gives you thousands of dollars a year worth of savings in lots of different areas.

 

So if you've got the pensioner concession card, you'll have reduced cost medicines, which is really important. You might even get bulk billing with some doctors, but the big savings come from the concessions you receive from various state and territory governments and local councils.

 

So you'll get discounts on your rates, energy bills, public transport, motor vehicle registration. It's actually a really, really long list. And you need to go around and tell everybody, I've got my pensioner concession card and here's my number.

 

And then you'll get those discounts applying automatically. Now, Kim, if I'm in a financially more fortunate position and I'm not eligible for the age pension and hence in the pensioner concession card, are there any other sort of concessions that I'm eligible for?

 

The good news is there is. There's another kind of card called the Commonwealth Seniors Health Card. And this one's available for people who aren't eligible for the age pension for whatever reason, usually because their income and assets are over the thresholds.

 

And so there's this other card where there's a separate income test that applies, which is a little bit different to the income test we just looked at. I don't want to complicate things by getting into it, but it looks at things like adjusted taxable income and deemed income from account-based pensions.

 

But the thresholds are quite high. So for a single person, you can have income of up to $95,400 or a couple, $152,640. And if your income's below those thresholds, you're eligible for this Commonwealth Seniors Health Card.

 

And the good news is that you get those reductions on the medicines. You might even get bulk billing from some doctors.

 

There could be some other concessions available, but it's not as extensive as for the pensioner concession card.

 

You don't get as many concessions under the Commonwealth Seniors Health Card. Sounds like a pretty good second prize. It is. It's a second prize. It's not bad, but it's not as good as the lovely pensioner concession card.

 

Okay, well, Neville, I might hand over to you now to talk about retirement essentials. Well, first, I want to sort of summarise,

 

I think, with a few key lessons for me. So, first of all, thank you, Kim, and I know everyone online.

 

Three key lessons for me. The first one is I think the thresholds are higher than what many people think before you lose access to the age pension. We did talk about the couple before with a million and $12,000, I think you said earlier on.

 

I know that I was quite surprised to hear that threshold, and that threshold is constantly changing a couple of times a year, in fact. And also, the fact that your family home, regardless of the value of the family home, that is totally excluded.

 

So, that's really important. I think the second one, and probably the biggest lesson, is don't leave it too late to apply. You use it or you lose it, there's no back pay. And I think that that 13-week window that referred to before, I think, you know...

 

If you're going to be applying for the age pension, put that in your calendar. Make sure you make the most of that and don't let a day go to waste because no one's going to pay you retrospectively. And the third one is that, look, Australia has a wonderful system, not seen in many parts of the world, but it is somewhat complex to navigate.

 

Glad we've got you to help us out and take us through it, but it is a reasonably complex system. And so to this end, we've partnered with Retirement Essentials, and you find details about Retirement Essentials on the CFS website.

 

There's specialists in the age pension to assist our members with understanding their own personal eligibility and applying for the pension itself. They have a free age pension eligibility calculator, which you can find through the CFS website.

 

Or if you do actually have your mobile phone handy, you'll see the QR code on the screen and you can sort of take a snapshot of that or take a photo to take a snapshot of that later on. And then you can put your own circumstances in and figure out how those rules that Kim has just taken through apply to you.

 

Now, some people will be certainly comfortable once they understand their eligibility in dealing with Centrelink themselves to go through that process. But for those that would value some help, we've partnered with Retirement Essentials to be able to provide that support to you.

 

And for a modest fee, which attracts a 10% discount for CFS members, it's something we've done specifically for CFS members, they can actually assist you with that process and actually do that process actually on your behalf.

 

Of course, also for those of you that would prefer to deal with a financial advisor, we have a find your advisor tool on our website. And for those of you who do have your own financial advisor, I would certainly encourage you to speak to them directly about it.

 

They will indeed have this knowledge and we'll be able to apply that to you directly. Now I did say we've got some... some questions that have come through earlier on and we have prepared some responses.

 

So we'll start, and hopefully we'll get through those. If we don't get through those, we will come back on those ones as well.

 

But the first one that's come through, Kim, is about superannuation, it's a great question.

 

You mentioned that superannuation is included in your assets and income if you're over-the-age pension. Does this mean it's not included if you are under-the-age pension age? Now, I actually got really confused on this one because if you're under-the-age pension age, how would you be eligible for the age pension?

 

We're talking about spouses here. Ah, yes, of course. We're talking about partners. Yeah, so it's a really good question. So, yeah, I did mention that under the assets test, if you've got money in superannuation in your over-age pension age, the account balance is an asset.

 

And under the income test, they deem it under the income test. But only if you're under-the-age pension age. over age pension age, which as we've just mentioned is 67. If you have a partner and that partner happens to be younger and they're underage pension age, underage 67, and they've got superannuation in their name, that superannuation actually doesn't count.

 

It's not an accessible asset under the asset test and it doesn't count under the income test. So there can be some advantages in having a younger spouse who's underage pension age. You might even consider moving money into the younger spouse's name.

 

Of course, there's a lot of considerations there and this is where a financial advisor might come in handy because it's not just the age pension we need to think about. It's a number of other things as well.

 

But from a purely age pension point of view, superannuation in a younger spouse's name who's underage pension age is exempt from the income and assets test. Fantastic. I did just want to mention one final thing though is I'm talking about superannuation that hasn't started to pay an income stream yet.

 

So if you started an account-based pension in the name of that person who's underage pension age, it does count under the income and assets test. It's only money that's sitting in super, not paying an income stream.

 

Lots of nuances that we need to know about, so thank you. Now, our second question is also a good one, Kim. You're just talking about account-based pensions. How are account-based pensions assessed under the income and asset test?

 

Yes, it's a very good question because account-based pensions, of course, is the most common type of income stream that people use when they want to access money from their superannuation in retirement.

 

And the way that Centrelink assessed them is that the account balance, the amount of money invested in that accountbased pension is an asset under the asset test. And for most people, under the income test, Centrelink applied deeming.

 

So that's those rates of 0.25 and 2.25%. They just times it by those rates, and that's the income that they assess under the income test. However, there's always a however, isn't it, is there's this thing called grandfathered account-based pensions.

 

And so if you have an account-based pension that commenced before January 2015, and you've received a Centrelink payment like the age pension since before January 2015, you'll have a grandfathered account-based pension, which is actually treated a bit differently under the income. test. They don't deem it. They actually look at the annual payments that you receive and they give you a deductible amount. I won't bamboozle you with it at the moment, but just so that you know there is a different treatment for those grandfathered account-based pensions.

 

Now, Kim, if I take out an account-based pension, I understand some of the rules that apply is that I must draw down a minimum amount. So for example, 4% to 5% of the initial balance and that changes based on my age.

 

That sort of feels like an income. Is that not relevant for these purposes? No. So if it's not a grandfathered one, if it started since 2015, then it's just deemed. They just apply those deemed rates.

 

They don't look at what you actually receive in pension payments. They just apply deeming to it to work out the income test value. Okay. So if you want to go to draw down more and you're worried about your age pension, don't be discouraged by that because it doesn't apply.

 

Wonderful. Now, this is probably the most common question that comes through and I no doubt you will get this one very commonly. are there strategies to maximise the age pension? That's right. I'd say the first thing is listen to a webinar like this, that should certainly help.

 

But yeah, what other strategies are there to maximise? Yeah, there's several strategies that can help to maximise the age pension. And really what we're looking at here is investing in things that don't count under the income test or the assets test.

 

So three strategies we can look at today, there's quite a few others, but these are three really important ones. Gifting, so if you wanted to give some money to family members, friends even, and there's actually an amount that you can give away that doesn't count as income or assets for Centrelink purposes.

 

So you can give away up to $10,000 per financial year or $30,000 over a five financial year period. As long as you don't exceed those thresholds, those gifts don't count under the income and assets tests.

 

Another one is funeral bonds. So funeral bonds are actually a type of insurance bond and you use those proceeds to pay for funeral expenses. And you can actually invest up to $15,000, that's the current threshold, into a funeral bond, and that amount won't be counted as an asset or deemed under the income test.

 

And the third one, and this is a really good one I think, is keeping the value of your assets updated with Centrelink. So quite often we fill out the forms when we first commence on the age pension, but over time, the value of our car might depreciate, our bank account balance might come down because we go on a lovely holiday and spend 30, 40 grand.

 

And we need to tell Centrelink of those updated balances because they reduce our assets and our deemed income, and that could cause an increase in our age pension. So there's some really important strategies.

You're buying a new car, and my experience you drive off the lot. I think that changes the value almost immediately. It does, yeah. So that's a certainly good one to keep updated. Now, in regards to deeming, and hopefully we've got the question up there on the screen, you can all see that.

 

You mentioned under the income test, financial investments are deemed to earn a certain amount. How is this calculated?

 

So I know you mentioned there's the two different rates before. Yeah, I keep mentioning it, but I...

 

I thought it might be good to actually look at an example of how deeming works in practice. So what's the link do is that they just apply a deemed rate to financial investments. So these are things like bank accounts, shares, managed funds, account-based pensions if they're not grandfathered, and superannuation if you're over age pension aid.

 

And by deeming, I mean, if you're a single person, they just say that the first 60,400 of your investments earns 0.25%, and anything over that earns 2.25%. Or if you're a member of a couple, they get your financial investments added together, and the first 100,200, they say earns 0.25%, and everything above that earns 2.25%.

 

So I'll give you a little example. We have Ben and Liz, and they're on the age pension, and they've got 300,000 of financial investments. So if we were gonna figure out the deemed income, we would look at the first 100,200, and deem it to earn 0.25%.

 

The remainder is 2.25%. We have a total of $4,746. That's the deemed income on that $300,000. So not too hard. Yes, it's pretty easy. When you know the list. The calculators do it for you. Once you know the list.

 

Sorry. Wonderful. Now, I was reading this as my wife is age 63. Actually, this is not the case. That was just the question that came through. Just confused me there for a moment. So the question we had is my wife is age 63.

 

She's still working. I'm almost age 67 and about to apply for age pension. How will my wife's employment income affect my age pension? Yeah, this is a really common question because when you have a younger spouse, quite often they might still be working when the older spouse reaches age pension age.

 

So how does that employment income affect their age pension? Well, the answer is that for the age pension, it's a combined income test. So they're looking at the income from both members of that couple.

 

So even though the wife is not applying for the age pension yet, because she's only 63, her employment income will impact them under the income test. And unfortunately, you only get the work bonus once you're age pension age.

 

So because she's under age pension age, she's not entitled to the work bonus. So her employment income will 100% affect them under that income test. But you can still receive quite a lot of income and get a part age pension.

 

So you can see the cutoff I've got there is $96,865.60 per annum. So only if the combined income of the couple exceeds that threshold will they receive meal income. Below that, they might receive a part pension if it's over the lower threshold.

 

So just getting back to one of the questions we had earlier on. So in this case, even though her income is included for the purposes of the income test, her superannuation assets under the assets test would not be included.

 

That's right, that's right. Her superannuation because she's under age pension age is not an asset and it's not deemed under the income test as well. There's two different tests, but again, as we said before, unfortunately, you've got to take the lower off the two tests.

 

Okay, that's certainly clear. Thank you. I think we have time for maybe one more question. Is there any assistance available

 

if you do not own your home, but rather pay rent? And we are seeing that sort of more commonly these days.

 

Is there any sort of assistance we can get in that regard? Yeah, that's a good question, because not everybody owns their own home, and rent is very expensive these days, isn't it, and very hard to afford on the age pension.

 

So the good news is there is some rent assistance available. It's not going to pay all of your rent, but it will help towards paying that rent. So if you receive the age pension and you don't own your own home and you're renting somewhere, there's this thing called rent assistance, which is like an additional payment. that you can receive on top of the age pension to help you with the rent that you have to pay. And it's really based on how much rent you pay. So I've given a little example there. For a single person, they would have to pay at least $188.20 per fortnight in rent.

 

So they would receive rent assistance of $188.20 per fortnight if they pay at least 396.94 in rent. So I'll say that again, because I mucked it up a bit. You have to pay at least $396.94 in rent. And then you would get the maximum rent assistance of $188.20 per fortnight.

 

Great, thank you. Just certainly a wonderful array of questions coming through. Now, I promise that we're going to get everyone out on time and be respectful of everyone's time. And so I'm going to try and wrap things up.

 

We will endeavor to come back to you with any other outstanding questions that we haven't come to. We will make sure that we send a link out to you for that shows you where to go for the age pension eligibility calculator that we talked about before with retirement essentials.

 

There is a QR code on your screen. No such thing as a free lunch, they say. Hopefully you're having lunch there at home. If you could take the opportunity to fill out a survey, we would certainly value your feedback.

 

As we said, we're always looking for ways to support our members to improve and indeed would value that feedback. The other thing I would encourage you to, as I mentioned at the outset, we do have a one-on-one consultation service just to help people understand what their options are.

 

Think of it as a one-on-one education on our website. There's an ability to go and book one of those consultation calls with our retirement team members. And again, we will send that out. We'll send that link out to you when we send out the responses to the other questions.

 

So that's all we have time today. So thank you, Kim, for doing a wonderful job and sharing with our members. Please don't hesitate if you have any more questions, do call through to our contact center.

 

Or as I said, have a look at the rich source of information on our website and feel free to book in a consultation with one of our team members. Thank you very much and have a lovely day. Thank you.

Hi everyone, thank you so much today for joining our webinar. Today we're talking about New Year's financial resolutions. I know we're in the middle of February but believe it or not it is the perfect time to talk about this because chances are you're slipping on your New Year's financial resolutions or your New Year's resolutions generally.

 

So my name is Michael Kemplin, I'm an education manager here at Colonial First State. I know it says Ryan on your screen, he's handling the camera and AV for me and then we've got Aaron Turner who's in the presentation as well.

 

So yeah we've got a really good presentation for you, a really good webinar so I hope you enjoy. Before we get started I pay my respects to the Gadigal people of the Eora nation on whose land I'm presenting from today.

 

The Gadigal people have a literal unbroken connection with the city of Sydney. They've been here since the day the city was founded and of course for tens and thousands of years prior. I also pay my respect to elders and traditional custodians throughout Australia and pay my respects to elders past present and emerging.

 

Another really important thing to point out is that anything that we discuss today is general in nature and doesn't take into account any of your personal circumstances. So my financial situation is going to be different to yours which will be different to the person next to you so it's important to remember that it's all general in nature.

 

We do have things called target market determination so if there's any products that we have that you want to know who they're targeted for or meant for you can get an idea of that through the TMD or target market determinator.

 

On top of that you are able to get financial advice and we have a tool called CFS find an advisor. Advisors are able to give you specific personal advice towards your situation and Aaron's going to put the tool in there for the chat as well if you want to find an advisor in your area.

 

With that said today we're talking about New Year's financial resolutions as the title suggests to give you an idea as to what to expect from today. So we're going to be here for about 30 minutes and we're going to talk about some I guess fundamental financial literacy stuff. and then we're gonna move into some different examples of goals that you can set. Some of them are gonna be goals that you can do immediately and you can get started on today and finish today. Others are gonna be goals that could take you 30 plus years if you're saving for your retirement.

 

And really it's the idea is to inspire you about what goals you wanna set for yourself and how you can achieve that as well.

 

So let's get into it. On the screen, what you're gonna see are a few examples of financial goals.

 

So these are all really noble goals and things that I think we all want to achieve or may have already achieved. But if something here stands out to you, hitting a savings target, paying down your debt, it's a really good starting point for working out, what's my goal for 2024?

 

What am I actually looking to achieve? But there's an issue with setting these goals in that they're quite general. So that's why when you're setting anything to do with goals and you're thinking financial goals in particular, being specific, measurable, achievable, relevant and timely, is a really important thing.

 

So as you're going through this presentation and you're thinking about potential ideas or potential goals, be specific. The example that we have here on the screen, we all wanna be rich, or maybe we don't, but I think a lot of people wanna be rich, but just thinking I wanna be rich is an idea.

 

But when you look at the example on the left and we're being specific, we know when we're gonna start, we know what's gonna happen in a year, we're gonna celebrate in a year if we achieve it, that's a little bit of additional incentive as well.

 

Think about it like that. And then not only that, but you've also got an idea of after you've achieved your goal, what you can expect. And on this example, we've got $25 to boosting your super when you pay off your credit card, but that could also be saving for a holiday or saving for something else that you like.

 

So being specific, measurable, achievable, relevant, and timely, I'm sure we've all heard of smart goals before, but unfortunately, we'll keep hearing about them because there's a reason why, and that's that they make goals more likely to be achieved.

 

But keep that in mind throughout the presentation. With that said, what you're gonna notice throughout today's presentation as well is that a lot of these goals are split into short, medium, and long-term goals.

 

When we're talking about short-term goals, like I said, there are literally goals that you can achieve today and you can get right into, whereas your long-term goals are gonna be things that are potentially far in the future.

 

The beauty of having goals in different timeframes is that they can actually work together and work in tandem with one another. So if you've got short-term goals, they can feed into your medium-term goals that feed into your long-term goals.

 

Another way to think about it is that short-term goals can be like dominoes, and you can knock them down one after the other and really actively pursue them, whereas your long-term goals may be more passive and something that you do in the background, put some money aside that you don't think about, and it builds up over time.

 

So they can work together and your short-term goals can help you achieve those long-term goals as well. All right, so we're gonna start talking about goals and as I mentioned, setting these goals... a really important part of it is gonna be being specific.

 

And in order to be specific, learning your numbers and understanding your situation is a really great place to start. So things like your income, that's how much money you earn, think about your wage and your salary, really fundamental stuff, I know.

 

But then we've got our fixed costs and those are things that are generally consistent and predictable, but also may be hard to change, think about your rent and your bills, and then your variable costs.

 

These can be a bit more unpredictable, but you may have more control over them. So that can be discretionary spending, that can be things like how many coffees you have a day, which hopefully isn't too many, but because you'll be bouncing off the wall, but they're things that you have more control over.

 

Then you've got your debt and savings, which is kind of like your financial position, where you sit overall. The thing with these is that they all kind of work together and in a way they're scales. So if your fixed and variable costs are added together and they're more than your income, then that means your debt's potentially gonna increase. and your savings are gonna drop. Whereas your fixed costs and your variable costs are lower than your income, well, your debt's gonna decrease and your saving could increase depending on where you allocate that money.

 

So actually taking a moment and writing down your fixed costs and writing down your variable costs is gonna be a great place to start because you'll understand where you're at. Money Smart has a tool available for you.

 

It's called a budget planner. Aaron's gonna put that in the chat for you. It's gonna give you a hand with doing that. There's an Excel spreadsheet you can download on that page as well. Personally, what I do is I actually just use my phone and I write them down on my notes.

 

I have my weekly expenses, I have my monthly expenses. So I have an idea of what my fixed and variable costs are. But learn your numbers, understand your situation, and that's a really good short-term goal to have that can help you with everything else we discussed today as well.

 

Another one that may seem really obvious is to actually check in with your super. A lot of you in here may check your super regularly and have seen it every day for the last year. I'm surprised at how often I meet people that haven't logged into their super or haven't taken a look.

 

Have you actually made sure that you can access it? Being able to access your super is really important for a number of reasons. First of all, you'll be able to do a lot of the things we're gonna discuss in a moment.

 

But second of all, do you know what your balance is? Do you know that your super's actually being paid? Do you know that you can log into your super account? Really fundamental stuff, but also something that you should make sure that you can do.

 

Aaron's sending through a link to download the CFS app, as well as the login page on the website, where you can take a look, see if you can log into the website. Really fundamental, good place to start, but also means that you can get in touch if you're not able to do so and get to that point.

 

We're gonna move into now the short-term goal of actually getting your super sorted. So what we're gonna talk about are four steps, and these four steps are essentially gonna be things that are really easy wins, you can get done today, and they're not everything you need to do for your super, but they're really good check boxes and admin things that can give you a sense of achievement. feeling that you've made some progress on your super as well. The first is to find lost super. So there's $16 billion of lost super out there. Some of that actually could be yours. If you've never checked before, there's a tool on myGov where you can look up your details and find out if there's any super out there that you can get moved into your current super account.

 

So Aaron's gonna put a link in the chat for that one and you can take a look. The second step to getting your super sorted is to consider consolidating your super. A lot of people have a number of super accounts and realistically if you've got multiple super accounts, chances are you're paying multiple fees.

 

So as the screen says there, less accounts, less fees. Chances are as well, you're also gonna be paying less, well have less paperwork, sorry, and you'll also be able to find all of your super in one spot and be able to keep track of it hopefully a little easier.

 

Before you make any changes to your super or roll it over, there are some things you wanna consider. So, checking to avoid a loss of special arrangements. If you have a defined benefits plan, if this rings a bell to you and you think that might be something that applies to you, first of all, congratulations.

 

If anyone knows what it is, maybe that will be funny to most people, it won't be. But with that said, if you have a defined benefits arrangement, it's best to speak to an advisor before making any changes to your super.

 

So keep that in mind. The second thing is to avoid gaps in your insurance. So with Superfunds, it does have an insurance component. And with many of them, you could have an employer that has an arrangement with your Superfund.

 

So there are things called automatic acceptance limits, which means that maybe you get coverage with your Superfunds that you have now that you may not be able to get elsewhere. So that's something to keep in mind and something to check before you roll over.

 

Checking the best provider for you is really important. You want to make sure you're not paying outrageous fees, that your fees are appropriate in the lower end, the lower decile, and same as your performance.

 

You want to make sure that the fund that you're in is also performing well and not charging you a lot of money. So that's something to keep in mind and consider before changing as well. And another thing you can do, of course, is to speak to a financial advisor.

 

So if you feel like you need that personal advice and you're really not sure, we did post that Find an Advisor link earlier, and you can take a look there for an advisor in your area. The third step is getting your Super Sorted.

 

So this is to check your investment mix. So as it says on the screen, different asset classes generally have different risk and return profiles. So when you think about something like shares, in the long term, generally, they'll look a bit like this.

 

They'll go up over time. But in the short term, the thing with shares is they can have volatility, and they may move like this.

 

And when you're 50 years from retirement, something like this may not be as stressful because you've still got a long way to go.

 

But if you're getting closer to retirement, some of that volatility can feel more impactful and maybe something you want to avoid. So checking the investment. mix that you have is relevant to you can be a really important step.

 

At CFS we have what's called a life stage. So life stage does this for you in the sense that as you get older your risk profile will change. So some of that volatility that happens in the short term can be reduced by being in a portfolio like this.

 

So if you're with the default fund with CFS you will be using life stage which means you have this. So it is the default but if you want to double check what you have and make sure it's relevant to you that's a great step to get you super sorted.

 

The fourth and final step before we move on to some other medium term goals and long term goals is to nominate a beneficiary. So as you can see on the screen here the benefits of nominating a beneficiary all around certainty and also making sure the money gets paid out.

 

So we can joke around and say it doesn't matter I'm not going to be there anyway. Well the reality is if something was to happen to you and you haven't nominated a beneficiary the people that you've left behind and are likely already struggling and grieving may have to face a really long time before getting paid things like life insurance or your super.

 

By nominating a beneficiary you can reduce the time it takes to have that money paid from a six month plus process. In New South Wales for example, estates take six months at a minimum to be distributed I should say, whereas if you've nominated your beneficiary that can happen in a matter of a few weeks.

 

Not the estate I should clarify, the super and life insurance payment can occur in a few weeks. So if you haven't done this already, it's a really easy win and definitely something you should take a look at doing to ensure your money goes to those who matter most.

 

Now we're moving into some more medium term goals, we're taking a step away from super for a moment to just talk about a financial resolution that you could set more generally. And that's to consider paying off high interest debts.

 

So high interest debts can be really detrimental to your financial health. And what you see on the screen here is essentially why. If something has a really high interest rate and you leave it to compound, that means that the balance that you need to pay will increase at a high rate.

 

So the example you've got on the screen here is two years where it's no payments are made. So generally you'll probably be making a minimum payment at least. But if we're looking at just the interest that accrues, it's quite significant in comparison to a mortgage, for example.

 

The difference between a mortgage and a credit card debt, of course, is that with the mortgage you have a house, which may generally increase in value to sort of offset that and not make you feel as bad about paying off the mortgage.

 

But with a credit card, it's very possible you've already experienced the benefits. You've already had that holiday, you've already got those new shoes, and they're probably not going to increase in value.

 

It's general, of course, but it's a reason why you might want to consider paying off a high interest debt is that not only is it working against you, but you may have already received the benefits and you're still just paying for the interest rather than the good itself. goals. So apologies for all the numbers and words on the screen I understand it's a little overwhelming but the first home super saver scheme is a really great option for people that haven't bought their first home yet.

 

The reason why it may be a great option I should say is that the reason super works is that the money you put into it can be taxed at a lower rate depending on a few variables and there are limits but if you choose to contribute extra money to your super you can actually use some of that to pay for your first home under this scheme.

 

There are a few requirements but in anything that you put in by default so your required deposits or your guaranteed deposits won't count towards this but if you were to put $2,000 extra into your super and you had the concessional contributions cap there's a bit of jargon there but I'll try and keep it simple my apologies.

 

The idea here is you can put it in your super and pay a 15% tax rate rather than your marginal tax rate which could be 30% which would allow you to save more towards your first home. The beauty of this as well is that if you're in a couple, you can actually combine forces.

 

So rather than this being $50,000 in total over a number of years, you can combine with another person and actually do a $100,000 contribution plus 85% of all earnings. So for someone that's like me and still looking to purchase their first home, this is a really good incentive to put money in my super that I may not do otherwise.

 

But of course, once again, Aaron's gonna put a link in the chat there for you, so you can understand in more detail. And I'll probably have to put it together a more visual slide for this to make it a bit clearer.

 

With that said, we'll move on to our long-term goal, which is making sure that you're on track for the retirement that you want. So when we're all working and moving towards our retirement, it's often something we put into the back of our mind.

 

But do you actually know how much you'll need for the retirement you want? Or is that something you've actually thought about? We've got two examples on the screen of what you may need or may want for your retirement.

 

And that is to maintain your current living standard, which is put together by Money Smart. And they say around two-thirds of your current income. ASFA, the Australian Superfund Association, say for a comfortable retirement, which is having a reasonable car story, an annual Australian holiday, great health insurance and air conditioning, you'd need about $50,000 a year for a single.

 

It's around $75,000 for a couple. But as you can see, there's a dollar amount and you get an idea as to what you'd get from that dollar amount. Money Smart, once again, have a really good tool that you can use for this.

 

You can put in all of your current details, so you could put in your balance, you could put in your income, and it'll give you an idea as to what sort of income you're on track to receive in retirement.

 

On top of that, you can also play around with voluntary contributions. So if you put in your details and you think, hey, I'd probably want a little bit more than that in my retirement, you can play around with that and see how much more you may want to consider putting in to make sure you're on track for the retirement that you want.

 

So I'm gonna take a moment to explain. and how small changes now can make a big difference to your retirement. This is also gonna be relevant to the first home super saver scheme and it might make that idea make a bit more sense now that I'm covering this.

 

But the idea with superannuation and putting money into your super is that the marginal tax rates and concessional tax rates are different. So a concessional tax rate in super is about 15%. And general, I think for the middle tax bracket I should say is around 30% or it is 30%.

 

$25 a week after tax. So if you've got $25 in your bank account chances are you've paid tax on it. That can get you five coffees or a nice lunch or a quarter tank of petrol. Before you paid tax on that amount at a 30% tax bracket, it would have been about $36.71.

 

So if we were to think about, okay, what if I went without that nice lunch? Or what if I went without those five coffees? You may not be able to go without the quarter. a tank of petrol unless you've got an electric car, but I'm starting to consider as well.

 

Well, the $36.71 taxed at the 15% concessional rate is about $31.20 that would be put into your super. So there's two benefits here. One of those is you're not going to spend the money because it's in your super.

 

Well, you are going to spend it, but not until you retire. The other benefit is that you're getting more money invested in your super than you would have in your pocket. So if you start at the age of 30 and you're really young and you've got a really long time to compound, that's great because you're putting more money in and it's got a really long time until you get there.

 

So there's benefits for those in the younger age, lower age of the age scale, I should say. But for those that are a little further along the age scale, there are still benefits because you are putting more money in your super than you may have otherwise.

 

But on top of that, you're also closer to being able to access those funds. So someone that's 60 and getting the benefits of a salary sacrifice has less time that they need to wait to potentially access those funds.

 

So there's benefits for both sides. If you're in the middle, you'll still get the compounding and you'll be closer to retirement.

 

But either way, looking at something like this, you can see why there's a benefit to doing so.

 

There are a lot of options for boosting your super. So salary sacrifice is one of them and probably the most well-known one.

 

There are also other things where you can contribute on behalf of your spouse and receive some tax benefits and downsides of contributions as well for those who are closer to retirement.

 

There's a lot more information you can find on all of these on our website. Aaron's going to put through a link to those now.

 

These are also things that you may potentially choose to speak to an advisor about as well because some of these can be pretty detailed and obviously all have their own limits and legislation behind them as well.

 

With that said, if you do feel as though you need financial advice or you haven't considered getting financial advice before, we'll see you next time. We have done some research recently here at CFS that did show that there are benefits to Australians receiving financial advice.

 

One of the stats that is a little alarming but also quite powerful is that around three-quarters of Australians who receive financial advice are positive about their financial future. To be clear, for both unadvised and advised Australians, cost of living was the number one concern from a financial perspective.

 

But for those who hadn't received financial advice, it was actually less than 50% of people felt very positive about their financial future. So if those stats are anything to go by, there are benefits there.

 

But on top of that, advisors are also able to consider your personal financial circumstances in a way that we're not able to address in a webinar like today. So if you are considering getting financial advice and you'd like to find a financial advisor in your area or near you, we do have the Find an Advisor tool that I'm sure Aaron will once again put in the chat for us.

 

We just covered a lot of ground, and we went through a lot there. I know that Aaron's definitely put those links in the chat so you can take a look at anything that piqued your interest. Of course, a lot of that was really high level as well.

 

But I hope something in there has inspired you to think about your own financial goals and think about what sort of things you could do to achieve them. And right on the screen here, I've done some of the work for you and put together some goals in there that you could consider.

 

So specific, measurable, achievable, relevant, timely, hopefully that's burned into your brain. But when you look at the screen, something like putting $2,000 into an emergency account by May or even limiting the amount of spending that you do on a discretionary item could be a potential financial goal.

 

That's why your challenge today is to pull up your phone and write down a financial goal of yours and something that you'd like to do and achieve this year or beyond, of course. With that said, if you want to download the CFS app, you can download it through the link on the screen.

 

If you do want to speak to someone at CFS, you can give us a call on 131336. And also, you can do all of the things we discussed today in the sense of getting your super sorted. I should be a bit clearer.

 

You can do a lot of that on the CFS app. So make sure if you don't have it, you get it. So you can access your super and do all those things. You may have noticed in the webinar today, there is a Q&A box.

 

If you have any questions or anything you'd like to talk about, you can pop those questions into the question and answer box. On top of that, in the feedback survey that I'm going to speak about at the moment, there's also a field for you to put in your details in case there's something you want to speak with us about or get in touch with you about.

 

With that said, thank you so much for attending our session today. I would really appreciate if you took a moment to provide us with some feedback. We're really excited to be able to provide you with webinars like this and would really like to hear from you around what sort of webinars you'd like, what sort of topics you're interested, and also how you think we went today.

 

Like I said, there's also a spot in there for you to put in if you want us to get in touch. But please take a moment, pull up your screen and fill out that feedback survey. Aaron's also putting a link in there for anyone that can't be bothered to do the QR scan themselves.

 

But yeah, thank you so much for coming today. It was nice 25 minutes, so I kept it nice and short and sweet for you and hopefully you all learned something. So really appreciate your attendance and have a great day.