Superannuation regulations are constantly evolving, and 2025 will introduce several updates that may influence your retirement savings. Whether you are beginning to build your super or preparing for retirement, staying informed about these changes can help you make well-informed financial decisions. Here’s what to expect:
1. Proposed Tax Increase for High Superannuation Balances
The government has proposed an additional 15% tax on earnings from superannuation balances exceeding $3 million, effective from 1 July 2025. This proposal has generated significant discussion, particularly concerning the taxation of unrealised gains and the fact that the $3 million threshold would not be indexed over time.
Although the legislation was approved by the House of Representatives in 2023, it faced challenges in the Senate in late 2024. The government requires support from minor parties and independent senators to pass the bill, but opposition to certain provisions has delayed progress. With a federal election approaching, the outcome remains uncertain. If the proposal is not approved soon, it may be postponed or withdrawn. The Senate is scheduled to revisit the matter in February 2025.
2. Increase in Employer Superannuation Guarantee Contributions
From 1 July 2025, the Superannuation Guarantee (SG) rate— the percentage of an employee’s wage that employers must contribute to their super—will increase from 11.5% to 12%. Although this increase may seem minor, it will contribute to the long-term growth of retirement savings. Employees should also check whether this adjustment impacts their overall salary package.
3. Increase in the Transfer Balance Cap
While contribution caps were adjusted for inflation in July 2024, they are not expected to change again in 2025. However, the Transfer Balance Cap (TBC), which determines the maximum amount that can be transferred into a retirement pension account, will rise from $1.9 million to $2 million on 1 July 2025.
This change primarily benefits individuals who have not yet begun drawing a retirement income. Those already receiving a pension from their super may also experience some advantages, depending on their specific circumstances.
4. Adjustments to the Total Superannuation Balance (TSB) Thresholds
As the TBC increases, the Total Super Balance (TSB) thresholds will also rise. These limits determine eligibility for making non-concessional (after-tax) contributions to super.
The table below outlines the expected changes:
| Current TSB Threshold (2024-25) |
Maximum NCC Cap |
Maximum NCC Period |
Expected TSB Threshold (2025-26) |
| <$1.66m |
$360,000 |
3 |
<$1.76m |
| $1.66m – $1.78m |
$240,000 |
2 |
$1.76m – <$1.88m |
| $1.78m – $1.9m |
$120,000 |
1 |
$1.88m – <$2m |
| $1.9m or more |
Nil |
N/A |
$2m or more |
Under these new thresholds, individuals with a TSB below $1.76 million may be able to contribute up to $360,000 over three years. As the TSB
increases, the allowable contribution limit gradually decreases. Once the TSB reaches $2 million or more, no additional non-concessional
contributions will be permitted.
Understanding these changes is essential for those seeking to maximise their super contributions. Seeking professional financial advice can help individuals make the most of these adjustments.
5. New Flexibility for Legacy Pensions
In December 2024, the government introduced new rules offering greater flexibility for individuals holding older legacy pensions, such as lifetime, life expectancy, and market-linked pensions within self-managed super funds (SMSFs).
These legacy pensions, which can no longer be established within SMSFs, have traditionally been difficult to modify due to strict regulations. Previously, converting these pensions required transitioning into similar products with restrictions on how reserves were allocated.
With the new rules in place, individuals now have a five-year window to review and adjust their legacy pensions if necessary. Given the complexity of these changes, consulting a financial adviser—particularly one specialising in SMSFs—is advisable before making any decisions.
6. Enhanced Super Fund Performance and Transparency
Large superannuation funds regulated by the Australian Prudential Regulation Authority (APRA) will face increased scrutiny to ensure they deliver strong investment returns and maintain transparency with members. In 2025, improvements in the following areas are expected:
These developments aim to make it easier for individuals to compare super funds and make informed decisions regarding their retirement savings.
7. Advancements in Superannuation Technology and Digital Innovation
Technology is playing an increasingly important role in superannuation, with ongoing investments in digital tools, mobile applications, and artificial intelligence. Many super funds are introducing enhanced online platforms that allow members to track their savings and make more strategic investment choices.
If you have not yet explored your super fund’s digital tools, now may be a good time to do so, as these innovations can provide greater control over your retirement planning.
Final Thoughts
Superannuation is a long-term investment, and even small changes can have a significant impact over time. As 2025 approaches, reviewing your superannuation strategy, staying informed about regulatory updates, and seeking professional advice where necessary can help ensure your retirement savings continue to grow effectively.
