Super for Lazy People - how to grow it if you don't want to SMSF

Discussion in 'Superannuation, SMSF & Personal Insurance' started by sash, 7th Jan, 2018.

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  1. Nodrog

    Nodrog Well-Known Member

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    Choiceplus does not allow members to participate in Share Purchase Plans.

    A Share Purchase Plan or SPP is an offer to existing shareholders to purchase more shares within that company, without brokerage fees. There is no legal requirement for a company offering a SPP to produce a prospectus. Due to the lack of disclosure documents, ASIC has a cap of $15,000 on the value of shares that each shareholder can take up through an SPP.

    E386B0D9-6092-410E-933D-4119EB51E1EA.jpeg
     
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  2. SatayKing

    SatayKing Well-Known Member

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    While those maybe good choices, it does appear limiting to me. However, they could well expand the available options over time. Bummer about no SPP participation but I guess, although the underlying beneficiary is the member, it'd require the fund to have a multitude of forms to enable it to apply on behalf of the member. Trustee stuff and all that.

    Only a minor aspect but does it means that, along with the LIC's MER, any fees imposed by the Super Fund pushes up the overall costs, i.e. fee upon fee concept? As I said only minor.

    However, on that aspect, I suspect fees will increase marginally due to the reporting requirements imposed following the 1 July changes, e.g. transfer balance cap reports which I understand is applicable to anyone who has super - although many may not actually be aware of it.
     
  3. Nodrog

    Nodrog Well-Known Member

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    It’s an absolute dogs breakfast. Imagine poor members who have changed jobs regularly and have multiple Super accounts. The onus is back on the individual to be across all of it.

    In our case we have a small PSS Pension (me) and PSS Accumulation (wife). Have to wait for PSS to provide Statements (slow) before we know what can happen with the SMSF for the year especially in my wife’s case who is still in Accumulation.

    Bloody politicians continually create such stupid legislation without any thought of the complexity they create.
     
  4. SatayKing

    SatayKing Well-Known Member

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    @Nodrog, certainly have a good point there.

    It's becoming overly complex despite the Government attempting to portray it is simplifying super. In a way it is but I am reminded of the time when Reasonable Benefit Limits were in place. Very few were directly impacted by it (in the 100's) and little revenue was raised but the annual expenditure by the ATO on maintaining its systems just in case a person did crack the RBL was in excess of $10m pa. I belive it was dropped because of that.

    I've mentioned elsewhere about a friend of mine. Two defined pensions totalling over 100k pa from the Government and a SMSF. You'd reckon the provider would be able to link the defined benefit payments via his TFN. Nup. Two seperate advices on his transfer balance caps and all his SMSF back into accumulation phase. He simply doesn't know what his tax position is this year and has some difficulty planning for it because it will only be when the tax returns are submitted he'll know. Wacky.

    The fact the Government has landed the ATO with administering this doesn't fill me with a lot of confidence - and that is not critcising the people at the ATO. They have to work with what they are dealt with.

    All this is periphal to @sash original intention of starting this thread but there are many complexities the the subject matter becomes intertwined with numerous other aspects. Sorry about that @sash.
     
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  5. Zenith Chaos

    Zenith Chaos Well-Known Member

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    For the same arguments that passive beats active I have gone for the strategy of super in passive instruments with the lowest fee percentage.

    Sunsuper offers one of the lowest fees out there where I can choose my asset allocations across index funds, which are basically equivalent to Vanguard's main Australian offerings.

    Although you might be able to find a comparably low fee with a cheap SMSF with your balance. There are ones that do most of the heavy lifting for you. I did the research and decided to go passive so no need for SMSF.

    With respect to your current setup, you should amalgamate to reduce fees. What are AMP charging? I'm guessing it's not cheap.

    Super charging is an oxymoron for superannuation. Super is designed to be in a low risk environment so it's still there when you retire or when the government wants to steal it from you. However, I can't see why you can't start an SMSF and go for some high risk products such as cryptocurrencies or options trading.

    So, if it was up to me, I'd first decide between SMSF and an retail or industry fund based on weighing up the pros and cons for your circumstances. Note, given you're already in Australian Super that should probably be your benchmark as it is a cheap and we'll respected fund and you've only got 10 years so transaction costs may be prohibitive. Multiple funds add fees which you will find are quite a drag on performance over the long term.

    Not advice.
     
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  6. Nodrog

    Nodrog Well-Known Member

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    He he. I used to work in IT there. I remember the Gov’t of the day wanting to introduce legislation that would significantly impact a number of existing systems. Trouble is there were multiple Gov’t proposals each requiring extensive analysis and coding changes to existing programs. To have any chance of having the systems ready for implementation by the crazy timetable the Gov’t wanted there was no choice but to design and code all alternatives without even knowing if the changes would be legislated. Lots of CASE and IF THEN ELSE decisions Statements were therefore needed:).

    From memory I don’t think the changes got through so all the work was unnecessary. A crapload of taxpayer money wasted. Plenty of overtime for me though:cool::).
     
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  7. SatayKing

    SatayKing Well-Known Member

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    I suppose there is nothing as such to prevent someone having a SMSF and an industry/retail fund if they want. Pundits would likely question it due to multiple fee levels.

    My guess is if the Trust Deed and investment strategy permit, there would be nothing to stop a SMSF participating in taking a riskier approach if the Trustee loved the thrill of speculating and wished to increase the odds. The Government hasn't mandated against that. It just assumes super will be relatively conservative from what I have read.
     
  8. sash

    sash Well-Known Member

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    Quick update.... I have just sold out of most of my direct shares on my Australian Super Members direct. The sale proceeds will take 48 hours to clear.

    Now mulling over whether to change to Hostplus or just buy ETFs in the existing Australian Fund...note that is for Super only. Decisions ...decisions....

    Will post my end structure of LIC/ETFs for the experts to comment. Thanks all.

    Again thanks for all the input....

    Next thing to tackle is to build Passive Income outside of Super but this time will include LICs.....

    Oh...I also worked out that if I use a Super fund they charge $399 for administration plus the MER based on an average of 0.18% on say 240k. So that is about $850 or an overall cost to the portfolio.....0.35% instread of the 1.02%...so a 60% plus savings.
     
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  9. SatayKing

    SatayKing Well-Known Member

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    Good going @sash.

    In a way, you've made an excellent point. Given the low internal cost as you describe, people have to decide between that and giving up some flexabilty available to SMSF's. It ain't always about bells and whistles.
     
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  10. sash

    sash Well-Known Member

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    Yeah...and the fact I am a lazy....lazy sod......:p
     
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  11. sash

    sash Well-Known Member

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    Just thought of something.

    If add say 2.2k to manage a SMSF...that would increase the actual MER to 1.2%...am I correct here....so essentially funds like Aus Super and others are SMSF Lite....but some flexibility is lost
     
  12. pippen

    pippen Well-Known Member

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    A have Aust Super DIY mix 80/20 split of Au shares and Int shares good for the franking and .356% fee pretty cheap however disappointed that they don't have lic offerings in the member direct option. Things may change in time tho! Fingers crossed! Currently maxing out pre tax contributions up to 25k with good employer match!
     
  13. oracle

    oracle Well-Known Member

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    I pay $899 fixed fee with esuperfund - fees per year. They always have initial setup and first year no fees special.

    I have been with them since 2013 and can say I have not spend more than 30 min. per year. They have pretty good systems where they automatically reconcile SMSF bank transactions, Buy/Sell transactions from broker and dividends and re-investments from Share registry (I believe). All I do is just confirm their automatic reconcile system hasn't made any mistakes, upload tax statement from share registry and hit the submit button.

    I have full flexibility to buy any share/properties etc I wish to purchase in any proportion. And I make full use of this flexibility by buying just one share. Vanguard Australian Share ETF (VAS) :D

    On a $1 million super the fees would amount to 0.089% and on $1.5 million the fees would be 0.059%.

    (PS: You still need to pay LIC/ETF fees on top of the above fees)

    Cheers,
    Oracle.
     
  14. sash

    sash Well-Known Member

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    Nice are you saying that you only have VAS in your Super portfolio?

    The bigger the amount the more SMSF makes sense....I agree with that.

     
  15. JDP1

    JDP1 Well-Known Member

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    Yep...typical story of government IT projects.
    Buy a house with the overtime... Well done I should say :)
    The government is welcome to increase our taxes/cut services to try such projects and many many other similar ones..all over again.
     
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  16. oracle

    oracle Well-Known Member

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    Yes, in super I only have VAS.

    Outside super I hold VAS, some LICs, International ETFs and some direct shares.

    For me the name of the game is simple is better. I fully expect direct shares to go in future and only have ETFs and LICs in portfolio.

    Cheers,
    Oracle.
     
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  17. Nodrog

    Nodrog Well-Known Member

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  18. Pier1

    Pier1 Well-Known Member

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    Where do I sign up for a Growth Bucket which returns 20% like that?
    Shut up and take my money!
     
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  19. Nodrog

    Nodrog Well-Known Member

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    To be honest I didn’t check the figures. I posted it for how it works not the performance. I’ve been quite a fan of the simple Bucket Approach for a long time and we use it ourselves. As I said earlier there are many variations of it but I like the simpliest ones best.

    Actuarial and consulting firm Rice Warner designed the system for Catholic Super.
     
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  20. Kat

    Kat Well-Known Member

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    I'm with HostPlus (Index balanced) but have been looking at some of the super funds self managed options to Al my own investments while avoiding some of the SMSF administration.

    I wrote to HostPlus last year about the ability to invest in LICs through their self managed option. This was their response (TL;DR HostPlus don't allow for LICs and didn't appear to be considering the option):

    "Thank you for your email.
    Before offering any LICs, Hostplus need to conduct research to ensure the LICs are Hostplus' standards. This level of research ensures the investment products we offer are of the highest quality.
    If Hostplus decide to offer members Listed Investment Companies they will be offered through the Choiceplus direct investment platform.
    Any announcements about Hostplus offering LICs will be made through the website and to existing Choiceplus members so check the website periodically for any new information about new investment products Hostplus will offer.
    I hope this answers your question."
     
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