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Help. Something odd about the KMP superannuation.

This covers the board and management of CPA Australia
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Brett Stevenson
Posts: 445
Joined: Fri Mar 24, 2017 10:43 am

Help. Something odd about the KMP superannuation.

Post by Brett Stevenson » Sat Jun 03, 2017 7:27 pm

Hi all,
Can I pass on a great email from a member who's concerns echo mine in terms of how he became involved in looking at what is happening at CPA Australia.
In so doing he has also asked a great question.
If anyone can shed some light on this that would be appreciated. There may be a simple explanation.
But then again, if what we have looked at to date in terms of membership numbers, remuneration over the constitutional limits etc etc, is any indication it may require a closer look.
The question is reasonably self explanatory so can I pass over to anyone who may be able to help.
Cheers
Brett

Begin forwarded message:
From:
Subject: CPA Australia - Alex Malley, Adam Awty, Jeff Hughes - their superannuation in the 2016 report
Date: 3 June 2017 at 6:33:26 pm AEST
To: bstevenson100@gmail.com

Hi Brett
I'm a CPA in --------------- that has been following with interest Joe Aston's comments in the AFR. I've always objected to the inappropriate and excessive "Marketing" expenses of CPA Australia, spending what is simply Members' Dues. I've recently become more excited by the absolute excessive remuneration of the board and key management, especially in light on continued increases in annual membership dues.

What amazes me, is the audacity of how these people expect to get away with what they are doing, given that their membership is financially numerate and a subset must most certainly love getting into financial detail! Therefore they can only rely on legal obfuscation and intimidation, to hide their activities.

So I've joined your mailing list today and have circulated information to other CPA members I know.

Thanks for your hard work and unifying voice.

I'm forwarding an email that I sent to Joe Alston yesterday. Essentially it's my observation that the superannuation payments for the KMP suggests that their ordinary pay is quite a lot less than their total fixed "Salary and Fees" which excludes the "Bonus" amount anyway. I haven't investigated further for accruals assuming accruals have been included in the Superannuation figure. Feel free to start discussing this information on the CPA Members.org forum. I couldn't see any reference to this issue on searching the word "Superannuation" and scanning through the first handful of recent threads.

Regards

---------- Forwarded message ----------
From:
Date: 2 June 2017 at 16:26
Subject: CPA Australia - Alex Malley, Adam Awty, Jeff Hughes - their superannuation in the 2016 report
To: joe.aston@afr.com.au

Hi
Just another thought - there's something peculiar about the superannuation figures for these three in the recently released "Information for CPA Australia Members" dated May 2017, on page 14. You may already be aware of this.

Take Malley for example - the Superannuation figure of $35k should be roughly, a minimum of 9.5% of Ordinary Times Earnings. That would mean his OTE would be $368.4k, yet his "Salary and Fees" is listed as $1.3671m. That means he's received $998.7k, in addition to his Bonus of $345.6k, that's not regarded as OTE - very peculiar. The same calculations apply for Awty and Hughes, though just not to the same amount in variation.

Of course the superannuation agreed to be paid may be more than 9.5%, which would make their OTE even less.

To note - I also find it curious that a search of "Malley" in the Information Report only finds this one instance on page 14. Same result for the other two surnames.

Hope this helps.

Regards

JWheldon
Posts: 327
Joined: Wed May 24, 2017 6:43 pm

Re: Help. Something odd about the KMP superannuation.

Post by JWheldon » Sat Jun 03, 2017 7:46 pm

Hello Brett and members,

Have provided a link which should hopefully explain this issue, and detail below. Basically this provides that employers only have to cover a minimum amount of super regardless of the actual salary earned by a high income earner. Alex Malley , Jeff Hughes and Adam Awty have been paid the minimum SG for the year and then salary sacrificed to their aged based limit, which for Alex was $35,000 and $30,000 for Adam and Jeff.

https://www.superguide.com.au/boost-you ... tributions

Maximum SG employer contributions for 2017/2018 year (and previous years)

April 15, 2017 by Trish Power 14 Comments

Note: This article explains the maximum superannuation contribution base for the 2017/2018 year, for the 2016/2017 year, for the 2015/2016 year, and for previous years.

The maximum superannuation contribution base is used to determine the maximum Superannuation Guarantee (SG) contributions that an employer is required to make under the super laws.

The maximum superannuation contribution base (MSCB) for the 2017/2018 year is $52,760 per quarter (entitlement is assessed quarterly), or the equivalent of $211,040 annually.

The maximum superannuation contribution base (MSCB) for the 2016/2017 year is $51,620 per quarter (entitlement is assessed quarterly), or the equivalent of $206,480 annually. The MSCB for the 2015/2016 year was $50,810 per quarter, or the equivalent of $203,240 annually. For the 2014/2015 year, the MSCB was $49,430 per quarter or the equivalent of $197,720 per year.

All eligible employees have a right to SG, although the amount of SG you receive is subject to this upper income limit, which is indexed each financial year (see table later in the article for a list of annual MSCBs since the 1993 year). What this means in Superannuation Guarantee terms is:

For the 2017/2018 year: the maximum SG that an employer is legally required to contribute is the equivalent of 9.5% of a person’s salary up to a maximum salary of $52,760 per quarter (equivalent of $211,040 a year). The maximum quarterly SG payment works out to be $5,012.20 per quarter, that is, $20,048.80 for the year.
For the 2016/2017 year: the maximum SG that an employer is legally required to contribute is the equivalent of 9.5% of a person’s salary up to a maximum salary of $51,620 per quarter (equivalent of $206,480 a year). The maximum quarterly SG payment works out to be $4,903.9 per quarter, that is, $19,615.60 for the year.
For the 2015/2016 year: the maximum SG that an employer is legally required to contribute is the equivalent of 9.5% of a person’s salary up to a maximum salary of $50,810 per quarter (equivalent of $203,240 a year). The maximum quarterly SG payment works out to be $4,826.95 per quarter, that is, $19,307.80 for the year.
For the 2014/2015 year: the maximum SG that an employer is legally required to contribute is the equivalent of 9.5% of a person’s salary up to a maximum salary of $49,430 per quarter ($197,720 a year). The maximum quarterly SG payment works out to be $4,695.85 per quarter, that is, $18,783 for the year.
For the 2013/2014 year: the maximum SG that an employer is legally required to contribute is the equivalent of 9.25% of a person’s salary up to a maximum salary of $48,040 per quarter ($192,160 a year). The maximum quarterly SG payment works out to be $4,443.70 per quarter, that is, $17,775 for the year.

Your employer must contribute 9.5% for the 2017/2018 year and for the 2016/2017 year (and 9.5% for the 2015/2016 and 2014/2015 years, or 9.25% for 2013/2014 year) of your salary only up to the maximum superannuation contribution base, which is linked to an individual’s earnings. What this means is the following:

For the 2017/2018 year: if your income for SG purposes exceeds $52,760 for a quarter (equivalent of $211,040 a year), your employer makes your SG contributions on the basis of the maximum superannuation contribution base.
For the 2016/2017 year: if your income for SG purposes exceeds $51,620 for a quarter (equivalent of $206,480 a year), your employer makes your SG contributions on the basis of the maximum superannuation contribution base.
For the 2015/2016 year: if your income for SG purposes exceeds $50,810 for a quarter (equivalent of $203,240 a year), your employer makes your SG contributions on the basis of the maximum superannuation contribution base.

For any earnings above this MSCB, your employer doesn’t have to pay super contributions under the SG rules for any earnings above this MSCB limit. For example, for the 2017/2018 year, if you earn $215,000 a year plus SG and assuming the income is paid evenly over each quarter, your employer doesn’t contribute 9.5% of your $215,000, but 9.5% per cent of $211,040 (for the 2017/2018 year), which works out to be an annualised $20,049 a year (or $5,012 each quarter). Note that it is possible to make a private agreement that your employer pays extra super contributions in addition to the maximum SG amount, but without an agreement, your employer is not legally required to pay super above the MSCB.

Likewise, for the 2016/2017 year, if you earn $215,000 a year plus SG and assuming the income is paid evenly over each quarter, your employer doesn’t contribute 9.5% of your $215,000, but 9.5% per cent of $206,480 (for the 2016/2017 year), which works out to be an annualised $19,616 a year (or $4,904 each quarter).

Note: In most cases individuals on higher incomes receive super benefits as part of a salary package, which means SG contributions are based on a much lower figure than a person’s total remuneration anyway. The maximum superannuation contribution base is adjusted each year in line with increases in average wages. The base amounts for the previous 24 years appear in the table below. The contents of the table have been sourced from the ATO website (and previous ATO publications).

Important: The MSCB is indexed annually based on changes in average weekly ordinary time earnings (AWOTE). In the past, the index rate was based on the Australian Bureau of Statistics AWOTE reporting of the March quarter. Due to the ABS now only reporting AWOTE changes twice a year (In June and in December), the MSCB indexation is based on the change in AWOTE from December to the previous December (rather than using March figures, which are no longer reported).
Maximum Superannuation Contribution Base
Income year Per quarter
2017-2018 $52,760
2016-2017 $51,620
2015-2016 $50,810
2014-2015 $49,430
2013-2014 $48,080
2012-2013 $45,750
2011-2012 $43,820
2010-2011 $42,220
2009-2010 $40,170
2008-2009 $38,180
2007-2008 $36,470
2006–2007 $35,240
2005–2006 $33,720
2004–2005 $32,180
2003–2004 $30,560
2002–2003 $29,220
2001–2002 $27,510
2000–2001 $26,300
1999–2000 $25,240
1998–1999 $24,480
1997–1998 $23,630
1996–1997 $22,590
1995–1996 $21,720
1994–1995 $20,780
1993–1994 $20,160
1992–1993 $20,000

Table source: ATO website

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