Contribution Optimisation Strategy

Clients who have a bit of spare cash after expenses may wish to take advantage of the favourable investment environment of a super contributions strategy.

Any contributions strategy should ensure that:

  • The client's net position reflects the specified amount to forego, after considering any tax implications of the strategy
  • Contributions are made in the most tax-effective manner, considering any tax free income levels and tax offsets
  • The strategy adheres to legislated contribution limits
  • Government co-contributions can be claimed if possible

The Provisio Contributions Optimiser takes all these factors into account, and allows you to customise the most complex of financial scenarios. However, simple contributions projections require only a minimum of client information, so you can use Provisio to quickly show clients how a strategy might benefit them.

About Provisio Contributions Optimisations

To optimise a client's contributions with Provisio, the only question you need to ask is, "How much extra income would you like to invest?" From that and a few basic client details, Provisio does the rest. It determines the level of concessional and non-concessional contributions that will achieve the highest benefit for the member, including co-contributions where applicable.

The simplicity of running a basic Contributions strategy through Provisio makes it an ideal tool for point of sale, whether at a laptop computer or via the web. It is easy to run "what-if" scenarios to show the difference a contributions strategy can make to the client's retirement. Of course, the Contributions Optimiser can cater for the most complex of financial scenarios.

The Provisio Contributions Optimiser considers:

  • Co-Contribution eligibility, and allows for a non-deductible contribution to claim the Co-Contribution.
  • Current and future contribution limits.
  • Amount to forego can be specified as an annual, monthly, fortnightly or weekly amount, so the client can express this figure “per pay” if they wish.
  • Amount to forego can be specified in either before-tax or after-tax terms.
  • Tax-Free income levels including Offsets, since there is no point in Salary Sacrificing income that can be had tax-free.
  • Any existing contributions the client has made.
  • Part-Year scenarios, since in the real world, few strategies actually start on 1 July.

A Simple Contributions Optimisation

The minimum required inputs for a basic Provisio Contributions optimisation are:

  • Current Age
  • Retirement Age
  • Income
  • Super Balance
  • Amount to Contribute

To run a simple optimisation:

  • Launch Provisio
  • Launch the Contributions Optimiser (click the CO icon)
  • Enter the required inputs
  • Click Optimise

Provisio presents charts and tables describing the year-by-year analysis of the strategy.

To export this optimisation to a Statement of Advice, click the Export icon to the right and choose Provisio Contributions Standard Template.

The standard template is included with the Contributions Optimiser module, and is a sample SoA we created in Microsoft Word. It contains Provisio docVariables and bookmarks where Provisio inserts key client data from the strategy.

For information on creating your own Provisio SoA templates and PDF forms, see the Provisio Template Authoring Guide.

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