Anything and Everything about Superannuation

Discussion in 'Superannuation, SMSF & Personal Insurance' started by trinity168, 15th Feb, 2017.

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  1. Scott No Mates

    Scott No Mates Well-Known Member

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    Property is a passive asset except for development sites. CBus is one of the few which actively undertake development projects.
     
  2. Gormy

    Gormy Member

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    Yes it seems to be working.
    The reason the Balanced Option outperforms is that it has 47% in unlisted assets and of that there is only 2% in Fixed Income and and 0% in cash.
    On the other hand the Index Balanced Option has 25% in unlisted assets and which is all made up of Fixed Income (15%) and cash (10%).
     
  3. SatayKing

    SatayKing Well-Known Member

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    The stuff coming out of the Royal Commission covers most of "Anything" about Superannuation.

    Most of it isn't surprising really. I feel a lot of what was wrong with superannuation providers was known to the regulators but as usual no action was taken. Who really knows why that was the case; external pressure; culture?

    I was slightly bemused about the case where a client selected the pure cash option and the return was less than what they would have got by simply placing the funds in the same account outside of superannuation. I have a small degree of sympathy for the provider in these circumstances.

    I know of one person who has super "because the Guvmnt said ya gotta have it" but will not have a bar of shares as they were "too risky" and went for the pure cash option. A provider, planner, whoever, could talk themselves blue in the face trying to convince this person it was a bad decision on their part but they'll fail completely. If someone has such a mindset and is convinced the Guvmnt "insists" they have superannuation I don't think there is much anyone can do in those circumstances.

    It's their right to stuff it up but I'll bet that when/if the outcome is realised they will complain to high heaven that it was all the fault of the provider - and all the self-righteous media will likely side with them. It's just the way it is.
     
  4. Redwing

    Redwing Well-Known Member

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  5. vudu

    vudu Well-Known Member

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    Considering moving my super from an AMP account to a retail fund. The fund matures in 2021. I'll be 60. Of course back in the old days that was considered retirement age.

    If moving, will my retirement age be moved to 65? Roughly calculated on current retail super fund earnings, keeping it as is will cost approx 10K over the next 3 years. No firm plans for retirement at this point but I may back myself to invest more profitably via real estate if and when the funds were to become available.

    My super consultant named on the policy is next to useless and I expect earns some commission. Thoughts? TIA.
     
  6. Scott No Mates

    Scott No Mates Well-Known Member

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    Is it a defined benefits scheme as you have a set maturity date? Many are more attractive than current funds, so advice is definitely required esp years out from retirement.

    I assume that you're in a work 'wholesale' scheme (not on public offer/closed to new members) vs a retail fund.

    If you are to continue beyond 2021, open a second retail or industry (accumulation) fund separate from the defined benefits fund which may go into pension mode upon maturity, provided you still meet the work test.

    (I'm not a financial advisor, licensed to give financial advice or drive a nail).
     
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  7. Jane Ridder

    Jane Ridder Well-Known Member

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    Fund maturity and retirement age are two different things. Sounds like you’re probably in quite an old fund and you’d need to check a range of factors, including any exit fees/penalties and any other lost benefits to move (including insurance cover).

    Generally speaking, you can access super benefits when you meet a condition of release, regardless of which fund you are in (though there are a few exceptions to this). The most common conditions of release are reaching age 65 or retiring after age 60. You can have a super fund mature but still not qualify to access this until meeting one of these conditions. If you’re considering using the funds for direct property then a Self Managed Super Fund may be more appropriate than a retail fund.

    All in all, you have a lot of factors to consider and I’d strongly recommend getting personal advice on this (but probably not from the adviser linked to this AMP policy!) A good adviser will wade through all the pros and cons and work out the best solution for your particular circumstances.

    This information is General Advice and does not take into account any person’s particular financial objectives, situation or particular needs. Before making a financial decision based on this advice you should consider, with or without the assistance of a financial adviser, whether it is appropriate to your particular financial needs, objectives and circumstances.
     
  8. vudu

    vudu Well-Known Member

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    Thanks Scott,

    I believe so. Maturity date is set at AUG 2021. Attractiveness is one of my concerns, though hard to define. Most recent statement indicates 1yr 7.97, 5yr 7.18, 10 yr 4.15 returns. Not so attractive compared to current retail fund returns. Only attractive in a sense that funds may be utilised upon maturity for better returns.

    Closed to new members and paid up some years ago.

    Currently have an active second fund with BT and was considering consolidating the 2 into a retail fund but I would expect that would push out any release of funds until 2026. I have a general plan, as a company director, to withdraw actively from day to day business operations over the next 5-10 years and may draw an income from directors fees rather than salary. I expect I need to further understand "pension mode" and "work test" to distil a plan.

    Disclaimer is as I would expect. Looking to understand what questions I need answers to.

    Appreciate your time and effort in reply.
     
  9. vudu

    vudu Well-Known Member

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    Thanks Jane,

    Wasn't aware of the difference between Fund maturity and retirement age. Policy began in 1979. I expect, to certain degree, I have some flexibility with retirement age. I am now starting to realise the complexity of the situation. Should I be seeking advice from my accountant or is this an area of specialisation? Point taken re current adviser and given the recent RC I'm becoming increasingly uncomfortable with the fund manager.
     
  10. Scott No Mates

    Scott No Mates Well-Known Member

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    @vudu - a defined benefits scheme will pay you $X monthly from maturity for the rest of your life (or whatever the agreement says - maybe 20 years or whatever), this will neither increase nor decrease and is not subject to the performance of the fund (essentially similar to an annuity). Find out what happens to the balance if you die within x years - does the balance go to your heirs/spouse or is it forfeited?

    A public offer fund (typical fund nowadays) - your monthly amount will run out when the money in your super account runs out - in years of great performance the balance will increase, in poor years your savings may decrease. The fund manager will rebalance the assets and will chew up capital by locking in losses (or gains) based on the stated goals of the fund.

    Speak to your accountant but make sure that they're qualified to give advice on super.

    Moving from a defined benefit fund would lose any of the benefits payable (which would probably far exceed what you have put into the fund so this is generally a big loss on your part), so best not to combine.

    Super fund is accessible once you hit the release age (you can get your hands on all super at 60), this age is different to the age at which different people can access the pension.
     
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  11. Jane Ridder

    Jane Ridder Well-Known Member

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    Yes, this is a specialised area that is normally handled by a financial adviser (who usually works on superannuation strategies every day).

    Yes, will need an AFSL, so will be a financial adviser anyway. Accountants are usually focused on your tax, not your super.
     
  12. SatayKing

    SatayKing Well-Known Member

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  13. SatayKing

    SatayKing Well-Known Member

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    Probably not the correct thread to raise this matter as there are potentially wider implications but I have been reading lately about legislation under the umbrella of Treasury concerning Directors of companies having a Personal Identification Number.


    Here is the link:

    Modernising Business Registers and Director Identification Numbers legislation

    See page 146 Section 2 of Bill 2 "Treasury Laws Amendment."

    I haven't explored the contents fully yet - I'm no longer paid to do it! - but it could apply to directors of a corporate trustee for a SMSF or maybe other entities such as a testamentary trust. More paperwork and fees (?) possibly in the pipeline.

    Some light, nighttime flagellation for those who are that way inclined.
     
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  14. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    This will only apply to companies not trusts directly - but will if they have a corporate trustee.
     
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  15. Redwing

    Redwing Well-Known Member

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  16. ShireBoy

    ShireBoy Well-Known Member

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    Sounds like a copy paste from what Scott Pape has been preaching all these years:
    Why you don't need $1m to retire - Life Begins At...
    I can't find the current figures, but back in 2015 he said the sweet spot was $250k for couples and $170k for singles.
    Points to note though:
    I believe these figures were based off the ASFA numbers for what retirees need to live comfortably.
    They've probably gone up since then.


    Probably the most memorable quote from Pape that has stuck with me from reading his book was:
    "The two most dangerous days of your life are, the day you're born, and the day you retire"
    When you stop working (and I appreciate a few of you have been pondering this in the FIRE threads), your brain can turn to mush and depression can set in.
     
  17. Zenith Chaos

    Zenith Chaos Well-Known Member

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    I need to do some calculations on super and age pension. In theory I can pay off my kids homes when I retire leaving myself with $250k. Why wouldn't people do this?
     
  18. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    The kids may lose it.

    And leaving it in super longer means lower or no taxes on compounding.
     
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  19. Chris Au

    Chris Au Well-Known Member

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  20. Redwing

    Redwing Well-Known Member

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    Hopefully they get the new version in soon also ;)
     
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