# Lump sum superannuation payments for retirees could end



## banco (24 March 2015)

I won't hold my breath for this to happen given the grey vote but we'll see:

Australians entering retirement will most likely be stopped from taking their superannuation as a lump sum and will have to access it through a structured self-funded pension, a top Treasury official says.

Treasury executive director and chief operating officer John Lonsdale signalled that recommendations from the financial system inquiry put forward to overhaul superannuation are likely to be adopted.

Read more: http://www.smh.com.au/business/bank...-could-end-20150324-1m6nou.html#ixzz3VIKrDf9S


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## sptrawler (24 March 2015)

banco said:


> I won't hold my breath for this to happen given the grey vote but we'll see:
> 
> Australians entering retirement will most likely be stopped from taking their superannuation as a lump sum and will have to access it through a structured self-funded pension, a top Treasury official says.
> 
> ...




Well the first thing you've got wrong is " a structured self funded pension"

It said.

Instead, when people retire their superannuation savings would automatically be transferred to a default fund designed to manage it in the paydown phase and provide a stream of retirement income.

Lol,Lol,lol, I said this to Sydboy a couple of years ago in the superannuation thread.

The Government and super funds, acting as their agents, take your super and give you a commensurate pension, on top of the age pension. Everyone says, give me some of that.

Then in 10 years time , Labor get in and says " why are these people getting the age pension when they are recieving this extra money?

We should means test it.

Wow the circle is complete again, it could only happen in Australia. Look into my eyes, look into my eyes


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## sptrawler (24 March 2015)

Just to highlight how dumb the media are, they bagged Hockey, when he only suggested young people may be better off being able to access their super to buy a home.

All the Laborites, jumped on the dimwitt wagon, shouting him down. Absolute dickwits,IMO

All that was required, was agreement on limitations, it could be used on.


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## Bill M (25 March 2015)

The more the Governments play with Super the less we trust it. By limiting people on how they spend their own super money, the less they will put in. In my working life I knew some guys that couldn't save money and never bought a home. They often said, when my Super matures I'll be pulling it out and buying a house cash. No lump sums means these people will never be able to buy a house. 

If I were any age under 54 I wouldn't be putting extra into Super, you just can not trust any government with their continous changing of the rules. There are many people out there that took out Super products with the promise of access to their funds at age 55, some Government in the past changed that to 60 for them, an extra 5 year wait. Now they have even mentioned 70 before you can draw on it, stuff the lot of them. Do not not trust your governments, be wise, have a plan B.


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## banco (25 March 2015)

Bill M said:


> The more the Governments play with Super the less we trust it. By limiting people on how they spend their own super money, the less they will put in. In my working life I knew some guys that couldn't save money and never bought a home. They often said, when my Super matures I'll be pulling it out and buying a house cash. No lump sums means these people will never be able to buy a house.
> 
> If I were any age under 54 I wouldn't be putting extra into Super, you just can not trust any government with their continous changing of the rules. There are many people out there that took out Super products with the promise of access to their funds at age 55, some Government in the past changed that to 60 for them, an extra 5 year wait. Now they have even mentioned 70 before you can draw on it, stuff the lot of them. Do not not trust your governments, be wise, have a plan B.




It's not the people who can afford to put extra in who the Government is worried about having to support through the age pension.


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## waterbottle (26 March 2015)

sptrawler, i have no idea what you just said. Are you saying that the government is going to confiscate super and only pay out a % per annum on top of the age pension?


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## sptrawler (26 March 2015)

waterbottle said:


> sptrawler, i have no idea what you just said. Are you saying that the government is going to confiscate super and only pay out a % per annum on top of the age pension?




My first post indicated that could happen, in a similar way it happened before.
There used to be a surcharge on the personal income tax to cover pensions, as is the case with the U.K, Canadian and NZ pension schemes.
In Australia, I believe it was decided that this money should be absorbed into consolidated revenue and pension paid from that.
Then means testing was introduced, and those with sufficient means, were given a reduced pension.
In UK, Canada and NZ, the system still pays pensions to those who have paid in, irrespective of their financial status.
There isn't a great deal of difference, in the situation we now find ourselves in.

The super funds don't want people to pull out their money, as they have to find the money to give them and lose their fees on the account balance.

The Government don't want you to pull your money out, as you might spend it and draw a greater pension.

So what works for both of them?

The Government says you can't take your money out, other than in a drip feed pension, that goes on top of your government pension.

Yippee everyone says, $22,000 government pension, chuck in the $300,000 super gives a guaranteed $40,000 pension(just an off the top example). 

Now move on 10 years, those with a pension of $40,000 are told it will be means tested, and their government pension will be reduced.

Hope that is clear enough.

P.S The government won't have to confiscate it, people will give their super balance willingly, if it will be paid on top of a government pension.IMO


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## Skatter (26 March 2015)

Its a Ponzi scam so if your allowed to play with your super and choose where you'd like your money to sit and grow do your research and work it out yourself. 
Id rather play and grow my own super so i only have myself to blame if all is lost.


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## Ferret (26 March 2015)

Skatter said:


> Its a Ponzi scam so if your allowed to play with your super and choose where you'd like your money to sit and grow do your research and work it out yourself.




Wrong.  There is the potential for Ponzi scams in super if the trustee is crooked, but this would be a tiny percentage of all funds in super.


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## sptrawler (27 March 2015)

Ferret said:


> Wrong.  There is the potential for Ponzi scams in super if the trustee is crooked, but this would be a tiny percentage of all funds in super.




You think.

It is all good while more workers are putting into super, than are retiring and taking money out

Let's see how it goes in 10 years time, when twice as many are retired and drawing out their super.

To me, there is a huge flaw in the system, no one audits the big funds.


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## Bill M (27 March 2015)

Skatter said:


> Id rather play and grow my own super so i only have myself to blame if all is lost.



That's all good and well and then the cash starved government of the day changes the rules and says you can't draw on your super until 70 y/o. How would you feel about that? It has happened before and it can happen again.


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## Ferret (27 March 2015)

sptrawler said:


> You think.
> 
> It is all good while more workers are putting into super, than are retiring and taking money out
> 
> ...




You don't seem to understand how it works.  Your super balance is your small portion of the assets that the fund holds.  These will go up and down with the markets, but there will always be assets backing the fund until the last person leaves.

As for no one auditing the big funds, are you sure about that?  I'd be hugely surprised if that were true.


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## banco (27 March 2015)

Ferret said:


> You don't seem to understand how it works.  Your super balance is your small portion of the assets that the fund holds.  These will go up and down with the markets, but there will always be assets backing the fund until the last person leaves.
> 
> As for no one auditing the big funds, are you sure about that?  I'd be hugely surprised if that were true.




Of course they are audited. He doesn't have a clue what he's talking about.


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## ROE (27 March 2015)

I don't think the government want you stop accessing your money
this rule will stop some of the rort in the system.

say someone with a few mil in Super, they make a lump sump draw give to their kids, stack it some where or whatever then claim centrelink payout as they got no money left.

We have a serious issue in this country where the rich is rorting the system just as bad as wealfare cheater


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## VSntchr (27 March 2015)

ROE said:


> I don't think the government want you stop accessing your money
> this rule will stop some of the rort in the system.
> 
> *say someone with a few mil in Super, they make a lump sump draw give to their kids, stack it some where or whatever then claim centrelink payout as they got no money left.*
> ...




Yep. After doing some time in the FP industry I can tell you that this post is pretty spot on.
Lots of rich folk coming in and looking for ways to gift money over and above the rolling $30k/5 yr limit.


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## Hodgie (27 March 2015)

ROE said:


> I don't think the government want you stop accessing your money
> this rule will stop some of the rort in the system.
> 
> say someone with a few mil in Super, they make a lump sump draw give to their kids, stack it some where or whatever then claim centrelink payout as they got no money left.
> ...




Along the same lines......

I see quite often in a situation where 1 partner in a relationship is not far off pension age and the other partner is younger that an adviser will recommend that the couple makes large contributions over the years into the younger partner's super. When it comes to the Assets test for the purpose of Centrelink entitlements for the older partner, the younger partners super cannot be looked at so it will not be included even though it contains a lot of the money which was earned from that same older partner.

Perfectly legal under our system though.


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## Pager (27 March 2015)

I tend too agree with ROE and VSntchr, and to be honest its about time the rorts were stopped, even so I also think it prudent to hold assets other than in super, maybe not as  tax effective,  but who is to know what futures governments will do and with an ageing population it wont surprise me if those with healthy super balances get slugged at some point to subsidise the benefits of all those who never lifted a finger to boost there’s and sadly most people don’t, but feel they have a right to get a decent state pension.

I’m still salary sacrificing but have stopped non concessional contributions, instead im building assets outside of super with spare cash, so if iam limited by how much I can withdraw (I will be bloody angry), at least I will have other funds I can access.


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## Bill M (27 March 2015)

^^^Good post Pager, I'm still holding considerable assets outside of super for the same reasons.


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## Smurf1976 (27 March 2015)

I have never trusted government to not meddle with superannuation, hence I have never voluntarily contributed as single cent to it. I prefer to build up my assets outside the system since, whilst less tax effective, that gives me greater control as to how and more significantly when I access the money.

That said, my superannuation balance is still a significant amount, the result of an above average income (and therefore employer contributions to super) combined with consciously choosing investment options which have been quite profitable. The current balance is roughly 40% of the total value of my investments (excluding principal place of residence).


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