Anything and Everything about Superannuation

I remember sticking my head in the echo chamber here in 2019, warning about buying for dividends. In the whats cheap in 2019 thread people reckoned AMP was cheap and wanted to buy it. I was a sole voice warning them not to and if if you want to invest in wealth management invest a high weighting in NWL, a lower in HUB and a little in PPE which now have returms of 200, 300 and 100%. Even the financial advisor making the sounds of waves crashing was silent. That is what happens if you focus on the bottom line and not top line growth. Shane Oliver is still a guru why do people listen to hin. He let a company in an industry that had strong tail winds and a long runway for growth remain in the stone age by not inveating in technology prefered to give out dividends and special payments. Those DRP payments at $18 arent worth much now.

 

Twists and turns never stop.

"Soon the High Court will hand down a judgement being the appeal from Hill v Zuda Pty Ltd [2021] WASCA 59. This will be a critical judgement. It will definitively answer (among other things) whether an SMSF binding death benefit nomination (BDBN) can last either indefinitely or a maximum of only three years.

Some in the SMSF industry have suggested that Hill v Zuda proves that BDBNs are too risky and an SMSF will is the way to obtain certainty and avoid the pitfalls of a BDBN. This article considers that issue: namely, is an SMSF will ‘safer’ than a BDBN? This article concludes that no, an SMSF will is not necessarily safer than a BDBN. In fact, in many circumstances, an SMSF will can be just as risky, if not more risky, than a BDBN."

Are SMSF wills really ‘safer’ than BDBNs? | Leading SMSF Law Firm

 

GigSuper | Australia's super fund for self-employed people

Aussie company GigSuper collapses leaving $2.7m in debt

Hundreds were left scrambling to see if they money was safe, yet the company launched a crowd-funding campaign after it knew it was in trouble.

A company that aimed to tackle “anger” when it came to superannuation has collapsed owing $2.7 million to unsecured creditors, as well as $200,000 to employees.

Yet GigSuper, which had 500 members, launched a crowd-funding campaign just two weeks after it was warned the fund would close in early 2022, according to the Australian Financial Review.

It had already raised almost $3 million from 300 shareholders over the last four years.

The fund was officially launched back in 2019 for self employed Australians and encouraged members to make super contributions by offering a fee-free savings account and an accumulation account.

But administrators were appointed to GigSuper on December 10 after concerns it rejected an offer from a rival super fund to buy its assets and was facing running out of cash.

Members were notified on Christmas Eve last year that the fund would be closed by the end of January, but email addresses weren’t hidden.

As a result GigSuper members contacted each other airing concerns they were having trouble withdrawing money from their GigSuper bank accounts, while others were worried they had lost money investing.

 

That’s such a privacy breach. And why! Why would anyone go with a tiny fund that started on fundraising page. Whyyyyyyyy!

 

ANAO audit on SG collection by the ATO.



Addressing Superannuation Guarantee Non-Compliance | Australian National Audit Office

 

Warning to all employers who havent met obligations. This issue has slowly become a matter that the ATO have worked VERY hard on behind the scene. They possess so much live data its now within ATO reach to act very hard and quickly. And they can match much of it using at least three different data points. 52,000 Directors received a caution letter last month that the ATO intends to enforce debts personally.

The old days of employees complaining then the ATO later chase it are no more.

In theory the ATO can now identify employers who are non-compliant within 30 days of the end of each quarter. Wont take much to turn that into a enforcement action

 

$50b in retirement savings gone — taken by vested interests in industry super funds

More than a decade ago the Council of Small Business Organisations of Australia suggested that changing the collection process for superannuation would be a good thing for everyone involved.

That idea was rejected by the industry superannuation funds and, as a result, between $42 billion and $72 billion in retirement funds has been lost to those funds’ members. The fear of competition from vested interests created this situation.

The original idea was to include an employee’s superannuation payments with the PAYG payments made to the Australian Tax Office by employers. Basically it meant that employers did not have to separately pay superannuation funds. The employer would have made one payment to the ATO instead of separate payments to the ATO and to superannuation funds.

The employer could not forget to pay the super or be tempted to not pay it because it is in with PAYG. The employer also could not have made a mistake in calculating super as it would be an amount calculated by the ATO. It is worth noting that the ATO chases late PAYG payments like politicians chase votes — they don’t let up.

cont...............

 

Conversely, how much tax has not been collected due to companies liquidating before paying out their obligations to the ATO? This would have seen about 10% more go uncollected.

 

The process of liquidation does not end superannuation and PAYG withholding obligations. It passes to the Directors through the Directors Penalty Notice regime and is a routine element of most liquidations. The ATO have recently been issuing 40-50 a day according to their media of recent times.

 

I recently listened to an interview with Noel Whittaker, who is highly respected. He says that at least 80% of people are not engaged with their superannuation! Seems about right.

 

I regularly read this media and am horrified by his apparent lack of knowledge of tax. Perhaps a space limit but financial advisers may only give tax advice relating to personal financial advice. Media post fail that test. I have written to the TPB with examples and suggested all media guidance on tax should be limited to their registration limits. Only tax practitioners should be writing in media. I had a respected media org seek to use my views on property tax but they wanted a short article that was edited. I refused to allow it and they were ****** but their article was factually incomplete. Ce la vie. I wasnt asked again. Oh well

 

I find it interesting that financial advisers and ASIC seem to be very concerned with people giving unlicenced financial advice, yet financial advisers often give unlicenced tax and legal advice with seemingly no problems

 

Financial advisers are meant to be registered with the TPB however the scope of what they can advise is VERY limited to the issues surrounding the financial advice. They all seem to think they can act as tax advisers when that completely incorrect. I find it ironic this is allowed yet an accountant cant mention things like contributions to super.

A well known case involving a Sydney solicitor is also a warning. The solicitor was advising on a property event to a well known mortgage broker (arguably the most successful in Australia). The solicitor didnt mention a CGT issue. Later the owner found out about the tax issue and sued. The soliictor attempted to claim they were not giving tax advice and the court determined they should have as it was a element of the legal advice. They tried to argue TPB registration as it was a tax agent service for which they arent registsred and the court didnt care. Their insurer didnt pay either as the insurer said it was negligence. The whole firms partners worse the loss.

 

Things might have chang d since I last looked but I think not all financial advisors qualify to register with the TPB. Only a minority are able to give tax advice.
What is the case name for that mortgagor broker case?

 

It doesn't! It's why you so often see pages of disclaimers...I'm not a registered tax agent. You should seek specific tax advice. This transaction may have tax implications. If you don't have a registered tax agent, I can make an introduction to a tax agent. You have not engaged me to provide tax advice. Only certain professionals can provide tax advice. I am not one of those professionals. You should seek professional advice that my professional advice is correct! And so on and so on.

 

Any wonder why some people reject it all (or as much as they feasibly can), keep it simple, do their own research and then DIY.

 

John Symond v Gadens partner..

 

I know of that one - wouldn't say he was a broker though. It involved very high level complex advice too.

 

Is the persons advice...advice that creates a action for negligence? Often not. Its like all things bad advice isnt necessarily a issue for liability. And even if it is the consumer often needs to successfully have their claim accepted. The insurers etc will fight them.

Protections are often limited and arent like insurance eg a car crash where its black and white.