Boost your retirement lifestyle with Voluntary Contributions
Will you have enough money when you retire for a comfortable and financially secure lifestyle? Will you be able to afford a nice place to live and some little luxuries to reward all your hard work during your working life?
Here’s where your superannuation comes in. The best way to save for a secure retirement, your super grows in a tax-friendly environment over the long term. And unlike normal bank accounts or term deposits, there are restrictions on withdrawing money from your super account, which helps you maintain a disciplined savings habit.
The compulsory 6% of salary contributions you make, plus the 8.4% contributions your employer is required to make on your behalf, plus the interest declared each year by Nambawan Super all combine to build your eventual retirement benefit.
And thanks to the power of compounding, even relatively modest contributions can create a very attractive retirement benefit over the long term. So it certainly makes sense to consider topping up your compulsory contributions.
As a Member of Nambawan Super, you are entitled to boost your super account by making Voluntary Contributions.
See how your money can grow when you do voluntary contributions. Click on our superannuation calculator.
Why make Voluntary Contributions?
There are two very good reasons. Firstly, by making additional contributions you can increase your retirement benefit in a tax-friendly way. This means you are likely to achieve a better return through super than if you invested directly into the same assets.
And secondly, since 100% of employee’s contributions are allowed for housing purposes, the more personal contributions you have made, the more you may be able to withdraw if you are eligible for a Housing Advance.
Contribution Options
Under the current super law, employers with 15 or more employees are required to contribute 8.4% of the employee’s salary to their superannuation account. Employees must contribute 6%.
Employees are allowed to boost their contributions voluntarily up to a maximum of 15%. This means you can choose a rate of additional contributions from 1% up to 9%. When deciding the rate of voluntary contributions right for you, work out how much you can afford to put away every pay period into long term savings, remembering that your contributions can only be accessed in very limited circumstances.
Alternatively, it may suit your personal circumstances to speak to your employer and repackage your employment contract with your employer to increase the maximum additional contribution is 6.6% of your adjusted salary.
You may also be able to negotiate for your employer to increase their contribution on your behalf up from the mandatory 8.4%.
For example, it may make good financial sense for you to take a salary increase as additional super contributions rather than cash payments. These special employer super contributions can be from 1% up to a maximum of 6.6% of your salary.
Listed in the table below are the mandatory and allowable Voluntary Contributions based on the provisions of the Internal Revenue Commission Tax Act of PNG.
How to start Voluntary Contributions
To set up voluntary contributions contact your payroll section. You will need to complete the relevant application forms, including a deduction authority. Your payroll section then arranges the necessary deduction codes so the contribution rate you select is simply deducted from your pay and paid to Nambawan Super on your behalf.
Complete a voluntary contribution form today and watch your savings grow.
Start saving now
Topping up your mandatory super contributions makes good sense as an easy no-fuss way to boost your eventual retirement savings and increase the amount of Housing Advance you may be eligible.
The earlier you start, the more the power of compounding can work to your advantage to build your retirement savings.
For more information visit your nearest NSL Office Phone our call centre on 1599 Email callcentre@nambawansuper.com.pg