Superannuation, the ultimate government cash cow?

[Belli]

Forgot to mention there is at least one critical downside with going with an industry fund. It is the Retirement Income Covenant which came into effect last year. It requires superannuation trustees to develop a retirement income strategy for their members that helps members manage spending of savings through retirement.

I feel a lot of "Get Stuffed" will be be forthcoming with the likely bumph I'll receive attempting to tell me what they think I should do with my superannuation money. Yep, I'm obviously so stupid that I don't know how to handle my assets or income levels to fit my desired lifestyle. It's bloody insulting.

As anticipated, expect an increase by external parties suggesting how you should utilise your superannuation and/or other financial assets. As for what income I have outside of the superannuation structure it is a matter between me, the accountant/financial planner and the tax office. I bet that merest thought of aspect had never even begun to cross the minds of those involved in preparing the report.

Review finds super trustees need to improve retirement outcomes planning | APRA

A thematic review of how superannuation trustees are supporting their members under the Retirement Income Covenant has found that trustees need to make more progress to enhance retirement outcomes. The review was conducted jointly by APRA and the Australian Securities and Investments Commission...

www.apra.gov.au

Click the link in the media release to download the full report if you wish.

 

[farmerge]

A heads up if people decide to roll over their SMSF to another fund. I was aware of this before any action was commenced but if you are in pension phase when you do it, the maximum amount which can be rolled over is your transfer balance cap. Any excess needs to be withdrawn. An in specie transfer of some holdings to my personal name was done to comply with the TBC requirement. It'll do wonders for my personal income last year with the ETFs involved. As for 2024FY, yeh, it'll definately be higher but given the high level of franking involved across my holdings, I don't think it will be too bad. If it is, tough. I made the decision so I cop the outcome of that decision.

I also wanted to avoid any unlisted products where possible such as infrastructure or property. I was prepared to forego some performance for the 'peace of mind' factor and I am comfortable with the decision to go with the fund's index only approach despite the fixed interest component being too high in my opinion. I've never liked those unlisted products as the actual valuation isn't transparent to me. In the past a couple of industry funds got hammered on re-valuation. I think MTAA was one - I recall it was the 'darling' super fund of some commentators at one point - and it subsequently merged with another fund.

I directed the account-based pension to a bank from which my household costs (rates, maintenance, utilities, all insurances, car rego, internet, running away from home money, etc) are paid. I'll see how it goes as probably every few months I'll transfer an amount out for other purposes or invest it.

It feels as if a weight has been lifted from my shoulders. I feel bloody good as a result.

Walking on air and feeling the sunshine????

 

[Belli]

Walking on air and feeling the sunshine????

Yes. I think it is an psychological outcome of having an external organisation doing the work and it putting funds into an account on a regular basis. While the SMSF was not difficult to administer and there was little to do really as the number of holdings was small and simple (ETFs and a few LICs) being the Trustee I was required to be involved to some extent. That obligation is no longer there. I consider it was a good decision in my circumstances In any event, I cannot undo what has been done and I have no regrets about the decision.

If ever I receive approaches from the superannuation fund about becoming involved in my detailed finances, I'll tell them, politely, I only require them to pay the pension and to go away.

 

[Belli]

I do despair sometimes. Notice the dichotomy?

'We're not paying the price': The boomers boosting inflation as the RBA lifts rates to fight it

The Reserve Bank is hiking interest rates — and hitting borrowers — to fight high inflation, but data suggests the fight is being undermined by big-spending baby boomers.

www.abc.net.au

yet no mention of......

Why won’t retirees spend their superannuation? | INTHEBLACK

A paradox is emerging in Australian retirement: retirees aren’t spending, even when they can afford to. Here's why many pensioners fear spending.

intheblack.cpaaustralia.com.au

which is reflected in

As anticipated, expect an increase by external parties suggesting how you should utilise your superannuation and/or other financial assets. As for what income I have outside of the superannuation structure it is a matter between me, the accountant/financial planner and the tax office. I bet that merest thought of aspect had never even begun to cross the minds of those involved in preparing the report.

As always blame, aka demonise, a specific generation or group for the woes.

 

[qldfrog]

I do despair sometimes. Notice the dichotomy?

'We're not paying the price': The boomers boosting inflation as the RBA lifts rates to fight it

The Reserve Bank is hiking interest rates — and hitting borrowers — to fight high inflation, but data suggests the fight is being undermined by big-spending baby boomers.

www.abc.net.au

yet no mention of......

Why won’t retirees spend their superannuation? | INTHEBLACK

A paradox is emerging in Australian retirement: retirees aren’t spending, even when they can afford to. Here's why many pensioners fear spending.

intheblack.cpaaustralia.com.au

which is reflected in



As always blame, aka demonise, a specific generation or group for the woes.

That is the way socialism can always win, demonise less than 50% of voters and you are reelected.
Democracy is rubbish once voters just vote selfishly..and selfish society we definitively are...
So yes you will lose your super for the benefit of the 51% others

 

[farmerge]

That is the way socialism can always win, demonise less than 50% of voters and you are reelected.
Democracy is rubbish once voters just vote selfishly..and selfish society we definitively are...
So yes you will lose your super for the benefit of the 51% others

Hmmm look after number one and stick it to the others. Peasants will always vote sideways when fear is the tool being used.

 

[mullokintyre]

The government have suggested super funds need to pull their fingers out and concentrate on the job they were designed for - helping people get to a comfortable retirement.
FromEvil Murdoch press

Superannuation funds have been told to lift their game after a spike in complaints, particularly over “unacceptable” delays dealing with insurance claims.
One in four superannuation complaints to the Australian Financial Complaints Authority (AFCA) in the past year centred on claim delays for life insurance, income protection insurance, and total and permanent disability insurance.

Super Consumers Australia director Xavier O’Halloran said the 136 per cent surge in complaints about claim delays in super was “shockingly high”.

Mr O’Halloran said the issue was now a key issue, citing the recent case of a widow who waited 15 months for her husband’s superannuation.

“That is way too long. We’re talking about people who are financially reliant on this money, and when a loved one passes away to have to be sent through the rigmarole for a year and a half is completely unacceptable from the super funds,” he said.
The delay in claim handling in general insurance and within super was the top issue raised with AFCA in 2022-23, despite the independent dispute resolution scheme raising its concerns with insurers for more than a year.

AFCA’s lead superannuation ombudsman, Heather Gray, said the increase in insurance claims delays was a significant issue.

“For every one of those complaints there’s somebody who is anxious and concerned, and is waiting to receive money which might be very important in their circumstances,” Ms Gray said.

“Often when somebody has made a claim about a disability benefit, they may be vulnerable, they’re unwell or they’re injured, and often they’re in financial hardship.”

Ms Gray called on super funds to be more proactive about claims for insured benefits, to avoid delays.

“We would like to see all trustees review the way that they deal with these claims for insured benefits and see whether there are opportunities for them to work with their insurer to make sure that they are dealt with much more quickly than they are at the moment.”

Mr O’Halloran said the super industry needed to “pull up its socks” and properly invest in both the claims process and customer service.

Mick

 

[farmerge]

The government have suggested super funds need to pull their fingers out and concentrate on the job they were designed for - helping people get to a comfortable retirement.
FromEvil Murdoch press


Mick

Know all about slow response from insurance claims department dragging the chain when I was injured. The claims manual only has one word on each page...." NO" not elegible. Took me 3 months to get what I was entitled to.

 

[sptrawler]

The government have suggested super funds need to pull their fingers out and concentrate on the job they were designed for - helping people get to a comfortable retirement.
FromEvil Murdoch press


Mick

The fat cat gravy train rolls on, with more immigration the inflows will continue to outnumber the outflows for a while yet, so concentrating on anything other than their paycheck isn't a priority IMO. ?

Super’s Baby Boomer tipping point has arrived

The financial system has been moulded by the post-WWII generation. As the silver tsunami of retirements is upon us, we should expect it to be entirely reshaped.

www.afr.com

Australia’s pension system is largely a defined contribution system, but it is solving the same problem of financing consumption in the retirement phase. So, we should be observing a migration of investments from growth asset classes into defensive ones.

Yet super funds still tend to favour equities over bonds. While US pension funds have boosted their fixed income allocations since 2017 from 22 per cent to 31 per cent, Australian super funds have cut theirs from 15 per cent to 13 per cent.

There is therefore little evidence to date that super funds are shifting their assets to reflect the changing needs of their members.
But it will certainly occur in time. The consequence for the financial system will be to evolve and adapt to attract our pension capital as it becomes more risk-averse and income-oriented.

That means more super funds and asset managers may expand their lending activities and if demand for retirement income products grows, there will be more long-term capital flowing into credit and fixed income.


Pension funds, however, are unlikely to supersede the banks as the main providers of credit into the economy.

The size of Australia’s super assets – at more than $3 trillion – is about the same as the big four banks’ asset base, but super funds will remain diversified into other asset classes.

But we should expect and plan for our financial system to evolve and cater for our ageing population. And if we’re going to encourage or mandate that Australians invest their retirement income, policymakers need to plan for how that will be generated in a way that benefits us all.

 

[sptrawler]

Singapore topping up its super.

Singapore Unveils $7 Billion Retirement Plan for Those Above 50

Singapore will hand out a S$7 billion ($5.2 billion) pension fund top-up for citizens aged 50 and above to boost retirement savings amid rising costs of living, Prime Minister Lee Hsien Loong said.

www.bloomberg.com

Singapore will hand out a S$7 billion ($5.2 billion) pension fund top-up for citizens aged 50 and above to boost retirement savings amid rising costs of living, Prime Minister Lee Hsien Loong said.

The so-called Majulah Package will help “young seniors” in their 50s and early 60s, especially those with lower incomes and less wealth, Lee said in his National Day Rally speech on Sunday. About 1.4 million Singaporeans will be eligible for the support, Lee added.

 

[Dona Ferentes]

yep, here they come. Another gabfest.
.
Treasurer Jim Chalmers has flagged moves to require superannuation funds to work harder to deliver steady income for Baby Boomers entering retirement.



.

 

[divs4ever]

yep, here they come. Another gabfest.
.
Treasurer Jim Chalmers has flagged moves to require superannuation funds to work harder to deliver steady income for Baby Boomers entering retirement.

View attachment 161318

.

hahaha the secret plan was for super to replace the aged pension ( not the much-vaunted mantra of supplementing the aged pension )

but 'super is a pile of money and administrators ( and politicians )can't resist meddling

regardless of Paul Keating's original aim , this has become a steaming mess

 

[sptrawler]

yep, here they come. Another gabfest.
.
Treasurer Jim Chalmers has flagged moves to require superannuation funds to work harder to deliver steady income for Baby Boomers entering retirement.

View attachment 161318

.

And in the same breath, suggests they invest in military equipment, as if that pays anything.

But it does fund the $350billion military black hole, is there any wonder people start SMSF's, smoke and mirrors at work as usual.

The super honey pot is looking like "my precious" to Chalmers.

 

[divs4ever]

not to mention the portion of many supers that hold Treasury Bonds

i hold BIS that is adequate exposure for me

maybe we could divert that cash going into 'the climate change fight ' ( or just stop trying to bully our trading partners )

by the way , i did study the MST ( Metal Storm ) saga , luckily without parting with cash that time

 

[sptrawler]

A discussion paper coming out, that will be good, better ways of taking, I mean spending your super.





So from that article, half of retirees draw down the minimum pension and they have on average a quarter of their money left when they die, so that really isn't bad because with inflation a quarter probably isn't a lot.


But then you get this from the media which paints another picture, I guess it goes back to what narrative you are trying to push, it's all in how you say it.
From this article on the same day:

Jim Chalmers needs to make hard decisions, not just grim forecasts

This report, with its flood of forecasts about a tougher future, must lead to serious reform if Labor is to have any credibility on national leadership.

www.smh.com.au

Chalmers leaned forward, however, on superannuation. He agreed, when asked, that many retirees were holding on to their super and passing it to their children when they could use it instead to live a better life.

“Ideally, before the end of the year, we will try and shape some policy development around retirement income products,” he said. This is code for making allocated pensions more attractive rather than using super for inheritances.

 

[dyna]

half of retirees draw down the minimum pension

The smart ones will continue to do just that , knowing that by having their hard-earned dough in the pension account and not the cash option , the growth assets should keep ahead of inflation.

Keeping ahead of Jimbo and the government's idea of what it thinks you should be doing with your own effin money , now that's the worry.
War all the time . There's no end to it.

 

[mullokintyre]

A discussion paper coming out, that will be good, better ways of taking, I mean spending your super.

View attachment 161349



So from that article, half of retirees draw down the minimum pension and they have on average a quarter of their money left when they die, so that really isn't bad because with inflation a quarter probably isn't a lot.


But then you get this from the media which paints another picture, I guess it goes back to what narrative you are trying to push, it's all in how you say it.
From this article on the same day:

Jim Chalmers needs to make hard decisions, not just grim forecasts

This report, with its flood of forecasts about a tougher future, must lead to serious reform if Labor is to have any credibility on national leadership.

www.smh.com.au

Chalmers leaned forward, however, on superannuation. He agreed, when asked, that many retirees were holding on to their super and passing it to their children when they could use it instead to live a better life.

“Ideally, before the end of the year, we will try and shape some policy development around retirement income products,” he said. This is code for making allocated pensions more attractive rather than using super for inheritances.

The stupid thing, if they "encourage" (read force) the old buggers to take the maximum of their super, it does not mean they will spend the money.
They are more likely to keep it the "safety" of a bank account and still pass it on to their kids.
I sometimes wonder if these fools ever actually thgink about what people actually do, rather than what the experts think they should be doing.
Mick

 

[divs4ever]

The smart ones will continue to do just that , knowing that by having their hard-earned dough in the pension account and not the cash option , the growth assets should keep ahead of inflation.

Keeping ahead of Jimbo and the government's idea of what it thinks you should be doing with your own effin money , now that's the worry.
War all the time . There's no end to it.

yes , one thing i have observed over time is pension rises NEVER keep pace with ' inflation ' ( that CPI mumbo jumbo thing )

Jimbo had better hope there is no double dissolution coming because he is starting to reek like Shorten

 

[divs4ever]

The stupid thing, if they "encourage" (read force) the old buggers to take the maximum of their super, it does not mean they will spend the money.
They are more likely to keep it the "safety" of a bank account and still pass it on to their kids.
I sometimes wonder if these fools ever actually thgink about what people actually do, rather than what the experts think they should be doing.
Mick

i hope not , it gives the really cagey old buggers , some chance to beat the con ( oops i mean system )

 

[macca]

On one hand, retired people are criticised for spending all their money and going on the pension and then the next pollie says you should spend it all before you die.

Most people do Not know when they are going to die or if they are going to get sick next year or who knows what else might happen?

Damned if you do and damned if you don't, so it seems to me