Anything and Everything about Superannuation

No, we would NOT have reached full independence, we would be on a part pension, and have the concession card with all its additional benefits.

In our case, the tax benefits did exactly what they were intended to do - remove us from reliance on welfare.

And you have no idea of our circumstances - we were not “rich”. I only ever worked part time and spent ten years at home raising children. We saved hard for our financial security, so please don’t be so dismissive of our achievements.

What sacrifices are YOU making for your retirement independence?

 

I didn’t say you were rich. I made no judgement on your circumstances. Me? I am making no sacrifices for my retirement independence. I am putting as much as I legally can into super and also investing outside super. I will be financially independent in retirement and probably would have been so without the tax breaks.

 

Sometimes circumstances can go your way despite it being the consequence of sad events.

Had a call from one of my children last night. They received funds from an inheritance. No, the money wasn't from me despite the wishful thinking.

The call was simply to let me know about it and they have decided to contribute it to their superannuation. It is sufficient to be made as both concessional and non-concessional. At least they are alert to the need to complete the relevant forms so the concessional aspect can be claimed as a personal deduction ,and when to do it, so they don't exceed the $25k limit.

 

It could be more than 25k! This is the first year for catch up contributions. As a tax agent I can see the ATO taxpayer data for this

 

Thank you @Paul@PFI.

I found the ATO link together with another with some worked examples which I'll forward on. I'll include the suggestion they seek professional advice.

 

ASIC probes AustralianSuper over fee disclosure

The corporate regulator is examining whether AustralianSuper is telling the truth when it blames government legislation for forcing it to introduce a new levy.

The $182 billion fund has already been forced to change information supplied to members about a 0.04 per cent levy announced in January and due to kick in on April 1.

 

Apparently there is some noise about super fund trustees being able to prevent switching or restrict withdrawls, I probably should write to the trustee of the SMSF and ask if this is ability is included in the trust deed.

 

Aren't you the trustee of your SMSF?

 

I forgot to put in the post.

 

does anyone have any experience with BT SuperWrap? recommend?

 

What did you find attractive about it?

 

From what I can tell, QSuper doesn't allow you to invest in things like Vanguard or Winton Global Alpha and better life/ TPD/ income protection/ trauma insurance policies.

 

AustralianSuper MemberDirect may be an option
Member Direct | AustralianSuper

Fully underwritten insurance can be paid from your super - no need to get junk policies from superfunds. Talk to an insurance broker/advisor.

I've mine from Zurich, fully underwritten linked policies with most of it paid from my superannuation and the rest from outside-super.

PS: Don't close your existing QSuper as you may loose access to any insurance policies already in place.

 

So duplicated fees ? :-(
The other new trap is that a policy could even be terminated by the fund for a inactive account and rolled over through the ATO to the other in some cases. We have seen a few cases of this and replacement cover may not be available.

The extra costs for member directed choices also need to be considered. These costs include direct and indirect. Indirect fees commonly include high brokerage, low (appalling) cash rates and even spreads on buy / sell. AusSuper was just critiqued for a new fee it plans to bring in which no other fund has. Another common member cost is limited product approval lists which can induce members to adopt risks due to limited product choice. Often its also a intended outcome as many funds have excluded risk and leverage investments for the product list. Where another may not.

What is a junk super fund insurance policy ? The cost of an industry fund policy vs any option externally may easily be 20% and higher for like cover. And not all funds permit member choice for insurers.

 

Don't have to hold two super funds if there is no need too. Hence the comment about sorting out insurance first with an adviser. I know someone who holds on to two funds because their original fund has insurance and by closing it down, that person will have to reset his coverage and start fresh again potentially exposing to clauses about conditions that you are "reasonably" expected to know and the lot. He moved his investment type to cash to keep the fees low and kept contributing enough cash to pay the premiums. Moved the rest of the balance to a fund of his choice.

Group policies from super funds can be rather limiting in terms of exclusions and cover and most would be non the wiser. Some won't have a choice (due to pre-existing conditions and may not be able to source insurance elsewhere) and have to stick to them but those that do should consider their needs with an insurance adviser and put in place something that is tailored for each individual needs.

Limited product approval list has to be weighed with doing much more expensive things like wraps and SMSFs which have their own pros and cons ofcourse.

 

I had my super with BT superwrap for about 5 years as it was a QROPS fund that I could transfer my UK Super in to. Got out as soon as I was legally able due to underperformance and high fees. Now with Australian Super.

 

Tax storm looms for super

Superannuation could be set to lose its preferential tax treatment in the COVID-19 recovery, an actuary has cautioned, with its chief noting the government flirting with a tax overhaul to pay its debt is “inevitable”.

In a statement, Rice Warner executive director Michael Rice has warned the super will “no longer be as sacred as it was in the past”, with the sector exposed to scrutiny in how it is taxed across contributions, fund earnings and member benefit payments.

The government will soon be due to complete its Retirement Income Review, with a report to be completed by the end of July.

Mr Rice expects the report will dig deep into the retirement system and to be the basis for resetting government policy, with the COVID-19 crisis to lead to more substantial changes than the government would normally take.

Industry speculation for example, he said, has forecast the mandated superannuation guarantee (SG) contribution from employers will meet its legislated increase of 10 per cent in July next year, before its eventual rise to 12 per cent is deferred.

Rice Warner chief executive Andrew Boal told Investor Daily the government will be looking for ways to pay off its bloated national debt post-COVID-19.

“We don’t want to be promoting a review of taxes on superannuation, but we feel that, it’s inevitable given that we’ve now accumulated an increased national debt through the JobSeeker and JobKeeper payments, and the like – that ultimately at some point the government is going to have to turn its mind to paying off that debt,” Mr Boal told Investor Daily.

 

Although they say that the change is inevitable, they don't speculate on what this will be.

Whether the government removes the tax-free status in the pension phase, charges 15% tax at all stages, removes CGT concessions etc there's plenty of scope provided of course that there's some balance which could comprise increased contributions caps/co-payments to offset the tax effect on earnings.

 

One tax agent banned and 74 referred to ATO for SMSF failures | Money Management

One tax agent banned and 74 referred to ATO for SMSF failures

 

Wonder what he wanted to hide ?