Your option to pay
off your surcharge
reduction account
This fact sheet explains the option you have to “pay
off” your Surcharge Reduction Account (Surcharge
Account) in the Equip Rio Tinto Fund (Fund).
What is a Surcharge Account?
Your option to pay off your Surcharge Account
In August 1996, the Government introduced a surcharge tax on employer
superannuation contributions (or the value of employer financed benefits
for defined benefit members) for members with adjusted taxable income
over certain limits. The surcharge tax must be paid from the member’s
superannuation fund and applied for tax years ended 30 June 1997 to
30 June 2005 (inclusive). The surcharge tax was abolished from 1 July 2005.
If you are a member of the Accumulation Division, you can transfer
amounts from your accumulation-style account in the Fund to ‘pay off’
or reduce all or part of your Surcharge Account debt to the Fund.
Where the Fund has received a surcharge assessment from the Australian
Taxation Office (ATO) for you, the Fund will pay the surcharge tax amount
to the ATO on your behalf. If surcharge has been paid for you, you would
have received a copy of the surcharge assessment issued by the ATO.
Where the Fund has paid surcharge tax on your behalf to the ATO, a
Surcharge Account is maintained for you in the Fund. The balance of
your Surcharge Account is the total of the surcharge tax payments made
on your behalf, accumulated with investment returns. The Surcharge
Account is a ‘debt’ or negative account, meaning that the account balance
is deducted from your total Fund benefit when your final benefit is
determined.
Investment returns are allocated to your Surcharge Account to allow for
the investment earnings that the Fund did not receive because of the
payment of surcharge tax on your behalf to the ATO.
The investment returns allocated to your Surcharge Account depend on
your membership category as outlined below:
Alternatively, if you are a Defined Benefit Member with an accumulationstyle account in the Fund, you can transfer amounts from this account to
‘pay off’ or reduce all or part of your Surcharge Account debt to the Fund.
You cannot use any of your defined benefit component for this purpose.
You can get an indication of your ability to pay off your Surcharge Account
by checking your account balances in your latest benefit statement.
However, you should obtain up-to-date balances of your accounts by
calling the Helpline on 1800 687 134 before considering this option.
What about future surcharge tax payments?
Whilst the surcharge tax ceased as at 30 June 2005, the ATO may still
issue assessments for surcharge tax payments for years ended up to
30 June 2005. This is most likely to occur where the ATO has had difficulty
matching their records with information provided by the Fund or where a
member has recently submitted, or re-submitted, a tax return for the year
ended 30 June 2005 or a prior year, or does so in the future.
Are there any issues to consider in paying off my
Surcharge Account?
• Rio Tinto Accumulation and Defined Benefit Division Members –
the lesser of the net investment return for the Fund’s defined
benefit assets and 85% of the 90 day bank bill rate but cannot be
less than zero.
• QAL Defined Benefit Division Members – the net investment return for
the Fund’s defined benefit assets
• QAL Accumulation Division Members – the net investment return for
your chosen investment option(s) or the Growth investment option
if you have not made a choice.
As described earlier, the investment returns that are allocated to your
Surcharge Account depend on your membership category.
Note: Net investment return is the investment return after investmentrelated costs, taxes and any levies.
Therefore, you should seek professional financial advice from a licensed
or appropriately authorised financial adviser to understand how this
impacts your personal financial position.
Website: www.equipsuper.com.au/riotinto
Helpline: 1800 687 134
However, in all cases, the investment returns that are allocated to your
accumulation-style account reflect the net investment return of your
chosen investment option(s), or the Growth investment option if you have
not made a choice.
Therefore, due to the potential for differences in the future investment
returns between these accounts, it may not be to your advantage to use
your accumulation-style account to pay off your Surcharge Account.
What do I need to do to pay off my
Surcharge Account?
Complete a Request to pay off Surcharge Reduction account form,
available from the website or call the Helpline, and send it to:
More information
If you have questions about paying off your Surcharge Account, please
contact the Helpline on 1800 687 134 or +61 3 8687 1835 for callers
from overseas.
Equip Rio Tinto Fund
GPO Box 4303
Melbourne VIC 3001
Other things you should know
If you choose to pay off your Surcharge Account in full and you have
sufficient amounts in your accumulation-style account to do so, an amount
equal to your Surcharge Account balance as at the date of processing will
be transferred from your accumulation-style account and credited to your
Surcharge Account. Your Surcharge Account balance will become nil and
your surcharge debt will be extinguished.
If you choose to pay off your Surcharge Account in full but your
accumulation-style account balance is not sufficient to cover your
Surcharge Account balance as at the date of processing, the full balance
of your accumulation-style account will be transferred and credited to your
Surcharge Account. As a result, your accumulation-style account will have
a nil balance immediately after the transfer, with your Surcharge Account
balance reducing by the transferred amount, but not to nil.
You will receive confirmation of the amount transferred from your
accumulation-style account and whether it was sufficient to pay off your
Surcharge Account in full.
The balance of your Surcharge Account (if any) following the transfer
from your accumulation-style account will be shown on your next
benefit statement.
Note: Once part or all of your accumulation-style account has been
used to pay off part or all of your Surcharge Account, the transfer cannot
be reversed.
Important note
Equipsuper Pty Ltd ABN 64 006 964 049 AFSL 246383 (“Equip”) is the Trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 (“the Fund”). The Rio Tinto Staff
Superannuation Fund transferred into the Fund on 1 July 2017 and is, from that date, a sub-division of the Equip Fund. It is referred to as the “Equip Rio Tinto Fund”.
This document and any information provided with it is for general information only. It does not take into account your personal objectives, financial situation or needs and should
therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial
advice. Before making a decision to invest in the Equipsuper Superannuation Fund, you should read the appropriate Equip Product Disclosure Statement (PDS). Past performance
is not a reliable indicator of future performance. Equip is licensed to provide personal and general superannuation advice under its AFSL. Member Advisors are employees of
Equip. For more information about the remuneration of Equip and its employees, please refer to the Equipsuper Financial Services Guide.
1 July 2017
RT416