June 2016: Asinta’s Partner in Australia, CA Financial Services Group, has reported back the following important changes in employee benefits thus far in 2016:
• Small employers (<19 employees) must meet the super stream standard by 30 June 2016. Large employers (20+ employees) should already be super stream compliant.
• Company tax cut from 28.5% to 27.5%, for businesses with turnover under $10mil.
• Changes to superannuation environment: Concessional contributions cap to reduce to $25,000 from $30,000. Lifetime cap on non-concessional contributions at $500K. Income earners over $2500K p.a. will be taxed an additional 15% on super contributions. Transition to retirement funds will now be subject to 15% tax (previously no tax applied). Employers may need to structure their benefit program differently to cater for these superannuation changes.
• Australia has an ageing workforce made up in large part by Baby Boomers, who tend to place a high emphasis on employee benefits (concerned with having enough in retirement). Some employers have as much as 50%+ of their workforce now over the age of 50.
• The personal insurance industry continues to attract claims. More claims will result in increased premiums across the board.
• Changes in advice process – Robo advice is being rolled out by industry super funds.
• Commissions being removed from products – The financial planning industry is moving towards fees for service.