Ask Peter Scott: Your questions answered

I discovered I have insurance with First Super. Can you please tell me what it is and am I paying extra for it? What are four units of death and total and permanent disablement (TPD) insurance?

Death and Total and Permanent Disablement (TPD) insurance provides a financial benefit if you die or become totally and permanently disabled. Cover is available for death, terminal Illness and TPD up to 70 years of age. When you first join First Super you will be covered automatically for four units of Death and TPD cover, provided you are aged between 11 years and 69 years. (Note there are certain conditions to meet). There is, generally, a premium that all members pay of $5.52 per week for Standard rate (this may be less if you are a Low Risk or under ‘Professional’ rates). The level of your default insurance declines over time so the level of insurance depends upon your age. For example if you are aged 35 years the value of four units equals $180,000. If you are 50 years of age the value of four units equates to $76,400.

Members can increase their level of insurance at any time. Members should review their insurances to ensure they have adequate protection (these days I believe it is even more critical to have adequate protection in place for members and their families). Members can also apply for Voluntary Income Protection cover. This insurance must be applied for by the member, as it is not automatic. Members should review their insurance needs in this area.

What are my options if I go over my concessional contributions cap?

Concessional contributions include both the employer superannuation guarantee and salary sacrifice. If a member has exceeded their concessional contribution cap this is referred to as having an excess concessional contribution (ECC). Members have a choice of how they deal with this. Firstly the ECC’s will be added to a member’s assessable income for the corresponding year and taxed at their marginal tax rate. The member will also be liable for an ECC charge. Generally the ATO will notify a member of any ECC and provide information on the process.

Members can pay additional tax or they can elect to withdraw up to 85% of the ECC to help pay the income tax assessment.

Members can call First Super’s Service Centre on 1300 360 988 for additional help.

The content in this newsletter is accurate and reliable as at February 2015. This information is of general nature only and does not take into account your personal circumstances or situation. We recommend that you seek qualified financial advice before making any investment decision. This newsletter is provided by First Super Pty Ltd ABN 42 053 498 472, AFSL No. 223988, as the Trustee of First Super ABN 56 286 625 181. If you intent to invest or hold this product, you should obtain and consider a copy of the Product Disclosure Statement which is available by calling 1300 360 988.