Superannuation, the ultimate government cash cow?

[Gunnerguy]

Yep I have since 1993, and it’s updated more than weekly.
Gunnerguy

 

[Belli]

Yep I have since 1993, and it’s updated more than weekly.
Gunnerguy

That's awesome.

 

[divs4ever]

For those who bailed out of superannuation "because I know how it works, ya know" have you bettered these numbers on a total return basis or don't you even know that?

View attachment 142595

well when i was in a super fund ( an employer-managed super fund ) it was getting between minus 2% to positive 2% per year BEFORE fees charges and insurance , when i left that job it defaulted to AMP who managed to only ever send me on update which inspired me to liquidate it and buy AMP shares ( via Comsec ) with the proceeds ( which i DRPed ) so roughly 8 years later i sensed AMP was losing it's way shortly before the Hayne Royal Commission

but maybe i am biased because at one stage my employer's super fund had a very large holding in the company's own shares ( and the company wasn't scoring a lot at that time )

when they finally reduced the holding to 6%, APRA sent them a memo recommending a 5% holding as more appropriate ( i noticed not a peep about the previously large holding which attracted the fees and charges just the same as a 5% holding )

BTW the company never quite made in clear if the company shares were voting or non-voting ones

so maybe other folks have had better experiences with their super , but i arrogantly felt i could do better myself ... and after a buddy's experience on claiming the insurance ( from AMP ) i am now much happier about the choice to abandon them

 

[dyna]

This weekend's AFR hints that Labor could be limited this term , to just raising tax revenue from the afore-mentioned multi- nationals.
However, Treasury 's getting the wind up already, about the $ 80 Billion budget deficit and the $ 1+ Trillion debt. They say it should be fixed by looking into the local players, hard at it, with " tax planning". And not just Superannuation, either. Although that's draining Treasury's coffers to the tune of $ 45 Billion p.a. ( Concessional earnings $ 22.6 Billion + Contributions $ 20.5 Billion and Capital Gains of $ 2.6 Billion ) .
What else in on the fiscal fiend's hit list ?
Housing. ( Not the sacred P.P.O.R ?......Yep. )
Trusts
Stocks ( That' us I suppose )
Private Health Insurance ( That'll be health rebates )
Anything left out of that lot? We'll know soon enough by the next election, I guess.

 

[sptrawler]

This weekend's AFR hints that Labor could be limited this term , to just raising tax revenue from the afore-mentioned multi- nationals.
However, Treasury 's getting the wind up already, about the $ 80 Billion budget deficit and the $ 1+ Trillion debt. They say it should be fixed by looking into the local players, hard at it, with " tax planning". And not just Superannuation, either. Although that's draining Treasury's coffers to the tune of $ 45 Billion p.a. ( Concessional earnings $ 22.6 Billion + Contributions $ 20.5 Billion and Capital Gains of $ 2.6 Billion ) .
What else in on the fiscal fiend's hit list ?
Housing. ( Not the sacred P.P.O.R ?......Yep. )
Trusts
Stocks ( That' us I suppose )
Private Health Insurance ( That'll be health rebates )
Anything left out of that lot? We'll know soon enough by the next election, I guess.

As long as any changes are done across the board in a 'fair' and open way, it shouldn't be a problem, the debt has to be fixed one way or another.

 

[divs4ever]

As long as any changes are done across the board in a 'fair' and open way, it shouldn't be a problem, the debt has to be fixed one way or another.

well we could slash the defense bill and stop buying war-toys we hardly ever use , and cut the rent-a-thug operations overseas

but 'fair and open' from a politician ?? you must be dreaming ( well maybe a rare one or two , but not enough to bring in a real audit team )

 

[dyna]

AustralianSuper's $260 Billion Balanced Fund is likely to post its first loss in 13 years. The year to date ( 9 th June ) return is down to just 0.83 % .
C.I.O. Mark Delaney predicts the 13 year bull market to end , but the ex- Treasury official does not see the R B A raising rates to 4 % .

 

[Garpal Gumnut]

AustralianSuper's $260 Billion Balanced Fund is likely to post its first loss in 13 years. The year to date ( 9 th June ) return is down to just 0.83 % .
C.I.O. Mark Delaney predicts the 13 year bull market to end , but the ex- Treasury official does not see the R B A raising rates to 4 % .

With Delaney's track record my prediction of rates at 10-12% would now seem more likely.

A bull market is now guaranteed.

Does he belong to one of the outfits with that annoying advertisement on the televisions about escalators?

gg

 

[Dona Ferentes]

Noel Whittiker writes well about the subject

Superannuation: a 30+ year journey but now stop fiddling

Few people have been closer to superannuation policy over the years than Noel Whittaker, especially when he established his eponymous financial planning business. He takes us on a quick guided tour.

www.firstlinks.com.au

and of course there is the Hon PJK having the usual slash

Paul Keating's long-term plans for super and imputation

Paul Keating not only designed compulsory superannuation but in the 30 years since its introduction, he has maintained the rage. Here are highlights of three articles on SG's origins and two more recent interviews.

www.firstlinks.com.au

 

[redsmartie]

Let's hope the government doesn't get funny ideas about changes. Won't affect me however, in the last 2 years I've moved my benefit into a rollover after taking a below low cap threshold where I will manage my own for awhile. Now 59 years of age, looking at the job market, it's never been better.

 

[sptrawler]

It sounds as though the rules governing super funds are to be checked out, I wonder if changes will help the members?

https://www.abc.net.au/news/2022-07-27/labor-winding-back-superannuation-reforms/101271562

 

[divs4ever]

fiddle , fiddle , fiddle

sadly governments just can't help themselves

 

[mullokintyre]

It sounds as though the rules governing super funds are to be checked out, I wonder if changes will help the members?

https://www.abc.net.au/news/2022-07-27/labor-winding-back-superannuation-reforms/101271562

Sometimes ideology just takes precedence over the common good.
Uber the orignal legislation , Super funds were required to disclose itemised details of political donations made by funds; itemised details of payments that funds frequently pay to a web of associated bodies; and itemised details of marketing and sponsorship expenses that funds, again frequently, outlay to various bodies using members’ money.
Is hard to see what is wrong with this idea, except for the fact that it was introduced by the coalition.
The industry funds in particular campaigned vehemently against this legislation (using members money of course), so obviously thy were not all that keen on transparency, full disclosure etc etc that people rave on about so much these days.
By various means, money from many of the funds inds its way back into the Labor funds machine.
How is that not something that people jare not jumping up in arms over?
Wheres ASIC, APRA, IBAC, ICAC or any of the other Alphabet mixes?
All MIA.
Mick

 

[sptrawler]

Sometimes ideology just takes precedence over the common good.
Uber the orignal legislation , Super funds were required to disclose itemised details of political donations made by funds; itemised details of payments that funds frequently pay to a web of associated bodies; and itemised details of marketing and sponsorship expenses that funds, again frequently, outlay to various bodies using members’ money.
Is hard to see what is wrong with this idea, except for the fact that it was introduced by the coalition.
The industry funds in particular campaigned vehemently against this legislation (using members money of course), so obviously thy were not all that keen on transparency, full disclosure etc etc that people rave on about so much these days.
By various means, money from many of the funds inds its way back into the Labor funds machine.
How is that not something that people jare not jumping up in arms over?
Wheres ASIC, APRA, IBAC, ICAC or any of the other Alphabet mixes?
All MIA.
Mick

Also I thought part of the legislation was to stop Governments through linked super funds, using members money, to finance Government/private infrastructure projects that would give very little if any financial gain to the members. It should be remembered that the industry funds are heavily loaded with ex politicians.
I find it interesting there isn't a lot of questions being asked, especially as this is the very early stages of this term of Government and there seems to be far more pressing issues, obviously not for the industry funds.
I'm surprised the members on here aren't going off about it, but Australia is known for its apathy, unless the media is leading the charge. Like I said before the election, people need a change of Government, to get some things done, that the coalition can't.

From the article I posted:
The Coalition strengthened the requirement a year ago as part of a suite of reforms called "Your Future, Your Super", changing it from a duty to act in the "best interests" of members to the best "financial" interests of members.

The difference between the two is that whereas spending members' funds on things such as corporate hospitality or wellbeing services or news websites might arguably be in the best interests of members, it need not be in the best financial interests of members.

And that's what superannuation funds are meant to be for — to grow rather than spend the trillions entrusted with them for workers' retirements.

To make sure the funds do it, the Coalition reversed the onus of proof. If questioned, fund directors needed to be able to demonstrate that their spending was in the best financial interests of their members, or at least in what they thought at the time would be their members' best financial interests.

'Best financial interests' up for review​

That might be the "regulatory complexity" the assistant treasurer is referring to — a requirement that directors use their members' funds to grow their members' funds, and be able to demonstrate that's what they were attempting if asked.

The Coalition's regulations require funds to itemise their spending on political donations and payments to related parties and industrial bodies, as well as their spending on marketing, in a statement to members before each annual meeting.

Transparency up for review​

Jones has drafted regulations that remove the requirement for itemisation while leaving in place the requirement for funds to report the totals to members.

It won't save the funds work (they still have to itemise each payment in order to prepare the totals), but it will save them embarrassment.

And he is tampering with perhaps the most important super reform of them all.

Last year, for the first time, each of the 80 MySuper funds (the funds into which new employees can be defaulted) was graded on its performance.

Performance test up for review​

Thirteen failed. They weren't being graded on absolute returns. That would have been unfair. They were graded on returns over the past seven years given their stated investment strategy.

If their strategy had been to, say, invest all of their members' funds in shares, and shares did badly, that would be fine so long as the fund's shares didn't do significantly worse than the share market as a whole over seven years — which is a way of saying it is a hard test to fail.

Under the Your Future, Your Super rules the 13 funds that failed were required to write to their members telling them they had performed badly and suggesting they switch to a better-performing product.

The second test will be this year. Any funds that fail two years in a row get banned from accepting new members.

Not that it's likely to come to that. Eleven of the 13 have merged or are in the process of merging with better funds, which is how the system is supposed to work. It is weeding out dud funds, and advancing members' interests.

 

[mullokintyre]

Also I thought part of the legislation was to stop Governments through linked super funds, using members money, to finance Government/private infrastructure projects that would give very little if any financial gain to the members. It should be remembered that the industry funds are heavily loaded with ex politicians.
I find it interesting there isn't a lot of questions being asked, especially as this is the very early stages of this term of Government and there seems to be far more pressing issues, obviously not for the industry funds.
I'm surprised the members on here aren't going off about it, but Australia is known for its apathy, unless the media is leading the charge. Like I said before the election, people need a change of Government, to get some things done, that the coalition can't.

From the article I posted:

Jones has drafted regulations that remove the requirement for itemisation while leaving in place the requirement for funds to report the totals to members.

It won't save the funds work (they still have to itemise each payment in order to prepare the totals), but it will save them embarrassment.

Why the haste?
I do not recall it being a major problem during the election runup.
It should not be a priority of the government to save the super funds from embarrasment.
Unless of course it might also save the government or some of its closer minions from embarrassment.
Mick

 

[sptrawler]

Why the haste?
I do not recall it being a major problem during the election runup.
It should not be a priority of the government to save the super funds from embarrasment.
Unless of course it might also save the government or some of its closer minions from embarrassment.
Mick

Yes, I'm just surprised how few people are concerned, the rules were put in place to ensure the super funds were doing there best for their members.
Funny how no one is worried that the changes may cost them a lot of money over their lifetime, maybe all the media have their own SMSF's and aren't worried, they should be that will be the next cab off the rank IMO.

Everyone worries about where Albo or Morrison are flying to, but no one gives a rats where there super money is flying off to.
Keep the plebs wearing their mushroom hats and feeding them nonsense, while their house gets robbed.?

 

[divs4ever]

Sometimes ideology just takes precedence over the common good.
Uber the orignal legislation , Super funds were required to disclose itemised details of political donations made by funds; itemised details of payments that funds frequently pay to a web of associated bodies; and itemised details of marketing and sponsorship expenses that funds, again frequently, outlay to various bodies using members’ money.
Is hard to see what is wrong with this idea, except for the fact that it was introduced by the coalition.
The industry funds in particular campaigned vehemently against this legislation (using members money of course), so obviously thy were not all that keen on transparency, full disclosure etc etc that people rave on about so much these days.
By various means, money from many of the funds inds its way back into the Labor funds machine.
How is that not something that people jare not jumping up in arms over?
Wheres ASIC, APRA, IBAC, ICAC or any of the other Alphabet mixes?
All MIA.
Mick

... some of those super funds are union-run funds , and those union-run funds often put directors on company boards

since many of those four-letter agencies are full of unionists ( as is the ABC ) ( and the unions fund the current government's election campaigns ) how could there possibly be a conflict of agendas

the agenda is claw as much cash out of the poor bloody worker as you can ( the more different ways the better )

 

[mullokintyre]

Just to keep the ledger square, the new government looks like it is going to fix a problem that has existed for many years, but probably because of their close ties to the big business cocktail set, never had the balls to fix.
From The evil Murdoch press

Many of Australia’s largest enterprises are set to be brought into the 21st century as the new ALP government vows to finally end the barbaric “unfair contracts” that have dominated dealings between large and small enterprises for two centuries. I have battled to end these contracts for more than 10 years.
The Liberal party in government knew these contracts were wrong but could not separate itself from the cocktail set and refused to honour its undertakings to ban the contracts.

New opposition leader Peter Dutton has to hope that the ALP does not use the banning of “unfair contracts” as a base to establish the ALP as the party of family business. If it does then Dutton is unlikely to ever be Prime Minister.

Back 10 years ago there were about eight million of these contracts but over the last decade many large companies have abandoned them but there remain many millions still in existence that now face being outlawed.

In very simple terms an “unfair” standard form contract gives the large enterprise rights that the smaller enterprise does not have. These rights may include the ability to change the price, cancel the contract and alter most other terms. Most are presented to smaller enterprises on a “take it or leave it” basis. If the contract has been properly negotiated on a one-on-one basis then the legislation does not apply. But “sham” negotiations will no longer work.

About six years ago, the Coalition passed legislation that declared unfair clauses in contracts to be void but there were no penalties. The big legal firms found ways around the act for their large corporate clients and ignored the will of the Australian Parliament.
Thanks to the work of then ACCC chairman Rod Sims a tough set of proposed rules incorporated in new legislation were set out with strong penalties. In the halcyon days after the Morrison 2019 victory the Coalition believed it could follow Robert Menzies and John Howard and become the party of family business.

It brilliantly mobilised all the state governments to embrace the Sims recommendations which also involved gaining support from the ALP. The required Commonwealth legislation was prepared and would have passed both Houses of Parliament in record time but the Liberals were heavily lobbied and succumbed.

During the election campaign the ALP took advantage of the Liberals vulnerability to intense lobbying from large enterprises and so embraced most of the proposed Liberal “unfair contracts” legislation its signature small business policy in the election campaign.

Triumphantly eating the Liberal’s lunch, Small Business Minister Julie Collins and Assistant Minister for Treasury, Andrew Leigh declared:
“The government is delivering its election commitment to make unfair contract terms illegal, protecting small businesses and the hardworking Australians they employ”.

And on one front Collins and Leigh went further than the Liberals by extending “unfair contract” protection to a larger number of small business contracts. Their legislation will increase the small business eligibility threshold for protection from less than 20 employees to less than 100 employees, and introducing an annual turnover threshold of less than $10 million as an alternative threshold for determining eligibility.

They plan to introduce legislation in the current sitting period. It will include “civil penalty provisions” (fines) outlawing the use of, and reliance on, unfair terms in standard form contracts. This will enable a regulator to seek a civil penalty from a court. The previous Liberal legislation prescribed jail penalties but fines may be sufficient.

However, in reference to the previpous posts, the article goes on to say

In office, the Liberals major small business achievement was to successfully speed payment to small enterprises. Part of that faster payment thrust was an arm of the Australian Building and Construction Commission which transformed payment speed on large building contracts. It is now in danger of being scrapped when the ABCC is dismantled.

It remains to be seen as to whether the abolition of the ABCC will indeed kill of those faster payments processes.
It could well be included in the legislation re the unfair contracts that would also account for extended payment conditions.
Mick

 

[divs4ever]

From The evil Murdoch press

as a former employee of NWS and therefore a member of News-Super it might take me months to undouble myself from laughter remembering the various super sagas , therein .. and that was during both LNP and ALP regimes and despite some workplaces being a 'closed shop ' ( while the union willing agreed to a 'enterprise agreement ' which they chose to not give a copy of .. to inquiring union members ... including the pay-master !! )

 

[Belli]

Got the SMSF return back from teh accountants today. Much to my surprise it was down only c 4.5% compared with the previous year. Don't know how that happened but I'll take it - not that I have any ability to change those numbers. The pension component is still well above my Balance Cap which is set at $1.6m.

Heard an odd one from a friend. He wasn't complaining just pointing something out which others in his sutuation may not be alert to. He left the good ol' public service a few years before I bailed out. Is in the CSS and receives a substantial life-time DB pension. At the time the Balance Caps were set his pension was greater than $100k pa. Before the 2016 Budget he would at a 10% rebate of the entire amount e.g. $103k would be a $10,300 non-refundable tax offset. However after the Budget the amount was set at $10k and it isn't indexed which means the greater the pension, the greater amount which is taxed at marginal rates.

Took me a bit to understand what he was getting at but it went like this in a very simple form.

Pre-Balance Cap. Income $103,000 taxed at marginal rates a subtract $10,300
Post-Balance Cap: Income now $120,000 taxed at marginal rates and subtract $10,000 rather than $12,000 as per Pre-Balance Cap.

He wasn't whinging about it just mulling over how many of his peers are in a similar situation but don't realise it. The Balance Cap process also meant his SMSF wholly reverted to accumulation phase. He couldn't give a toss reasoning if the Government decided to turn the SMSF into a wealth creation exercise, so be it. Means a greater amount his kids will get.