Member news March 2018

Start super-saving towards your first home now!

Start super-savingIf you're a first-home buyer, you may be able to withdraw your extra super contributions after 1 July 2018, to put towards your deposit.

The First Home Super Savers Scheme (FHSSS) means that you can start saving now to achieve a deposit faster and get a tax break on your earnings.

How it works

As of now, you can direct a maximum of $15,000 of extra contributions into the scheme within one financial year. Extra contributions (above the compulsory 9.5% Superannuation Guarantee that your employer makes) must be made within the existing contributions caps. Concessional (pre-tax) contributions are taxed at 15% which means you can avoid paying tax at your personal marginal tax rate. Non-concessional (after-tax) contributions can also be directed into the scheme. Once you've found the house you want to buy, you can use up to $30,000 (or up to $60,000 per couple combined) of your contributions, plus a deemed rate of interest for your deposit.*

Are you eligible?

  • You can start contributing at any age, but the scheme's funds will only be released once you're 18 or over.
  • If you've ever owned a property in Australia, you won't qualify unless you can prove previous financial hardship
    (as specified by regulations).
  • You're not eligible if you've ever had FHSSS funds released to you before.
  • You'll need to live in the property for at least six months of the first 12 months that you own it.

These conditions will be administered by the Australian Taxation Office who will process the release of your deposit at the time of purchase.

Should you use this scheme?

The details of the FHSSS can be complex, so it helps to speak with one of our financial advisers when making a decision.
Call us on 1300 130 780.

*Before you start saving, ask us about fees, charges and insurance implications that may apply. You will also need to include the assessable amount in your tax return. We'll send you a payment summary with your annual statement. The deemed rate of interest is based on the 90-day Bank Bill rate plus three percentage points (shortfall interest charge rate).

Hello unit pricing, goodbye crediting rates

Unit pricingUnderstanding why your super balance goes up and down is more than just checking fees, contributions and insurance premiums. It is also knowing how – and when – your super fund calculates and applies investment earnings to your super savings and what those returns are.

Traditionally we have used crediting rates to apply investment earnings to your account. However, on the 26 March 2018 we will be moving to daily unit pricing, which is the methodology used by many super funds and investment trusts. This means we will be reporting daily unit prices in place of weekly and month-end crediting rates.

What is unit pricing?

Unit prices provide an estimated snapshot of what your super or pension investment option is worth at a specific point in time.

Like shares, unit prices move up and down each day, in line with the investment earnings for that investment option. Unit prices increase when investment earnings are positive and exceed the investment fees and investment-related tax for the relevant investment option. Unit prices will decrease when investment earnings are negative or less than fees and tax for the relevant option. All investment earnings are thus reflected in the unit price of each investment option.

For example, if you have a super balance of $10,000 and the unit price for the Balanced option is $1.00, you will have 10,000 units. At the end of the financial year, if you still have 10,000 units and if the unit price has increased to $1.10, you will have an account balance of $11,000. We will be using unit pricing or ‘unitisation' to work out the changing dollar value of your super account on a daily basis. We are implementing unit pricing as an efficient way of fairly assigning a share of the value of an investment option between all the members who have selected that option.

How does unit pricing work?

Any contributions into your super account ‘buy' a number of units in your chosen investment option based on the daily unit price when the contribution is received by us. The opposite happens, however, if any money is deducted, or you receive a pension payment. Any deductions from your account (including administration fees) ‘sell' a number of units in your chosen investment option for the value chosen based on the daily unit price when the request is received by us.

How does this benefit you?

Unit prices will give you more up-to-date information about your account balance.

When you change investment options, rather than having to wait for the next weekly crediting rate to be published, you'll be able to see your investment change and the relevant unit price allocated within two business days.

If you make a request to change investments before 4pm AEST/AEDT, your account will be invested in your new investment choice using the unit price allocated that day. Requests received after 4pm AEST/AEDT on a business day, or on weekends or public holidays, will be invested using the unit price allocated for the next available business day (which will appear within two business days after that).

When you check your balance online, it does not reflect today's valuations in the underlying assets as this is not calculated until the end of the business day. For instance, if the Australian share market rises 1% today, it will be one-to-two business days before you will see this reflected in the unit price applicable for today.

Annual returns and unit prices

You may notice a slight difference between your balance and unit price you see on your online account, versus the official annual returns that will be printed on your LUCRF Super statement. Although these variations are usually small, they can be confusing.
These small differences are captured when we calculate the monthly and annual returns a few days after the end of each month, meaning our published returns are more reflective of the month or year's market movements.

Any questions?

Please call us on 1300 130 780.

Good news – investment fees are going down

Good newsWe work hard to keep our fees low for members.

Effective 26 March 2018 our investment fee for the following options will reduce:

  • Cash option – from 0.10% to 0.08%
  • Indexed Shares – from 0.18% to 0.15% (fees are shown in after-tax amounts). 

Want to know more about our investment options and what might be right for you?

Simply call us to speak to one of our advisers on 1300 130 780, this advice is included as part of your LUCRF Super membership.

Faces of LUCRF Super – Kelly Tunbridge

Kelly Tunbridge has been with LUCRF Super as long as she can remember.Kelly Tunbridge LUCRF Super member

"Being a LUCRF Super member, I don't even have to think about my super. I know it's in good hands with low fees and good returns and it's so easy to manage". Going on maternity leave for the first time was a challenge for her. "It was the first time since age 14 that I didn't have my own income and I was reliant on my partner," she explains. "This was unsettling for an independent person like me. It also made me realise that I would lose super payments which put me behind in the long run. It's a challenge everyone will face. In hindsight I should have been supplementing my super in the years leading up to having children."

Kelly is married with two kids and her next big challenge is to return to full-time work and focus on her career once her daughter starts school. "Finding the balance of a working parent will be a struggle as it is for everyone," she says. "You need to adjust as you go along and there isn't just one path that suits everyone."

Even though retirement is still a long way off, Kelly trusts that LUCRF Super will help her achieve her ultimate plans for life after working: "Travel, travel, travel and more travel!"

Love your life: 3 bright ideas to help lift your super

Love your life - 3 bright ideasDoes your super balance seem a little flat?

Most of us have big plans for our retirement. Unfortunately it's unlikely that the 9.5% Super Guarantee amount that your employer pays will cover even a modest retirement for the majority of Australians.

So how about we get behind our super to give it the boost it needs?

Here are some simple, tax-effective ways to help you enjoy the retirement you deserve.

  1. Not earning big bucks at the moment?
    If you can make an after-tax contribution to your super you could reap the benefits of the federal government’s co-contribution scheme
  2. Earning enough to give yourself a little more?
    Make a before-tax contribution to your super – known as salary sacrificing – and take advantage of rewarding tax benefits
  3. Not sure where you left your super?
    Search for any lost or unclaimed super that you may have and consolidate your super into one account. That way you'll only need to pay one set of fees.
    Being a member of an Industry SuperFund puts you ahead because of our low fees and strong performance history.
    Financial advice regarding your super is included as part of your LUCRF Super membership. Call us on 1300 130 780 so that one our professional financial advisers can you help you lift your super.

Skip bank fees – save $500 annually

Skip fees

When it comes to saving money it pays to sweat the small stuff. A raft of everyday banking fees could be gouging a hole in your finances.

Reserve Bank data shows the average Australia household is being whacked with close to $500 in bank fees each year1.

Here’s where you can save.

Your everyday account
If you’re paying a monthly account-keeping fee on your everyday account, you’re wasting money. Even if you’re paying just $5 a month that adds up to $60 annually.

Scour your bank statement for any monthly account service fees or sneaky charges for common transactions like own bank ATM withdrawals. If you’re paying any of these, it’s time to think about switching to a better value account.

Your credit card
Research group Canstar says the average annual fee on non-reward credit cards is $42 but for reward cards the annual fee can be as high as $7002. The thing is, there are dozens of credit cards with no annual fee, making it possible to skip this cost altogether.

Your home loan
Home loan application fees can range from $200 to $7003 though the average is around $5024.

Here’s the thing. Not all banks charge a home loan application fee. That’s a valuable saving – and something worth looking for.

However, home loan fees don’t end there. You could also be slugged with ongoing charges either through regular account-keeping fees on the loan or fees that apply each time you use a redraw facility. And they can add up to as much as $7504 each year.

That makes it a no-brainer to look for a home loan with zero account-keeping charges and free redraw – they do exist.

The bottom line is that with some shopping around, and by making the switch to better-value banking, you could be rewarded with savings worth hundreds of dollars each year.

Thanks to ME Bank, you’ve got access to a range of special offers to help you get more from your banking. It’s just another great reason for being a member of LUCRF Super.

This article is brought to you by ME. For more information, please visit The trustee of LUCRF Super does not recommend, endorse or accept any responsibility for the products and services offered by ME Bank.
Members Equity Bank Limited ABN 56 070 887 679.