Superannuation, the ultimate government cash cow?

[Smurf1976]

Hmm, just because you outsource an activity doesn't mean you can abnegate your responsibility for it.

That is however the exact reason why government in particular likes to outsource things and same goes for not all but certainly some big corporates, especially those with a "business administration" style of management (as distinct from entrepreneurs or technical people running it).

It's not about saving money.

It's about managers covering their rear end and being able to blame someone.

Same reason for going with off the shelf, generic approaches to core business. Eg investment funds that are basically just investing in the S&P500 are an example of what I mean there. If it goes wrong well they can say they followed a benchmark, they did what everyone else did, so it's not their fault.

True innovation does exist but there's plenty of businesses actively avoiding it.

 

[Bellcose]

@Bellcose I came to the conclusion many years ago that the money we were putting into super, once it left our control, it became the super funds, and their care to us was close to zilch.
Hence we closed off that fund and started investing in real estate.
At least we had control of what was ours and we knew what the outgoing costs were.

Yeah, I'm receiving a pension from AusSuper. Presently going into an account which pays all my non-discretionary expenses. The draw down rate is far greater than required and I usually disperse the excess every so often to my children. I don't care if I chew up super. My income outside of super is more than sufficient to fund my preferred life style. If I end up with zero in super that's fine as it means no requirement to deal with all the BS associated with paying out funds after my demise. Executors then only have to deal with my personal financial assets which are relatively simple.

 

[sptrawler]

Superannuation is getting political.

Especially when Greg Combet was recently appointed to head the Future Fund, WOW it is becoming a full house of representatives, in the super sector.

Wayne Swan defends controversial CFMEU appointments to Cbus board

Wayne Swan was hauled before a Senate committee, where he was grilled over the governance failings engulfing the embattled fund.

www.theage.com.au

Cbus chair Wayne Swan has defended the controversial appointments of three CFMEU-linked directors to the board of the $94 billion superannuation giant, as he apologised to 10,000 members who waited too long to receive their death and disability benefits.

Swan was hauled before a Senate committee on Friday morning, where he was grilled over the governance failings engulfing the embattled fund, including its links to the disgraced construction union and a Federal Court action for allegedly failing to process insurance claims in a timely manner.
During an at-times testy exchange between Swan and Liberal MP Andrew Bragg, a heavy critic of industry super funds, the committee also heard Cbus had handed the prudential regulator an independent report it had been ordered to conduct into its governance, and the entire superannuation sector was grappling with issues stemming from third-party administrator Link.
“I want to apologise to all those who’ve been affected in our fund and that we, as a board, when we first became aware of the magnitude of this problem set out to rectify this problem, and something like 80 per cent of the unresolved cases have now been dealt with,” Swan said.

“We are also engaged in a very substantial uplift in our fund across the whole area of risk management, and part of the restructuring of the executive in our fund in recent times has been a new chief risk officer. So we have frameworks in place, and we are working with the regulators to ensure that they are the best possible frameworks.”

 

[Bellcose]

Superannuation is getting

.. more and more interesting.

Members of Cbus will be overjoyed to know the Trustees can charge a fee to the fund. This is taken from the fund's reserves. The purpose of that fee? To pay a penalty imposed for non-compliance e.g. the Trustees screw up like delaying payment of death benefits? Guess the Director's fee is safe though which is good to know. I suppose if they drain the amount put aside due to a penalty the Trustee can go back in to the super fund's reserves for another bite.

No idea if members of the fund actually know that but then I am assuming they are informed of these things via some wanky notice on the fund's website.

 

[sptrawler]

.. more and more interesting.

Members of Cbus will be overjoyed to know the Trustees can charge a fee to the fund. This is taken from the fund's reserves. The purpose of that fee? To pay a penalty imposed for non-compliance e.g. the Trustees screw up like delaying payment of death benefits? Guess the Director's fee is safe though which is good to know. I suppose if they drain the amount put aside due to a penalty the Trustee can go back in to the super fund's reserves for another bite.

No idea if members of the fund actually know that but then I am assuming they are informed of these things via some wanky notice on the fund's website.

It just seems to be a playpen, with other peoples money IMO.

 

[farmerge]

It just seems to be a playpen, with other peoples money IMO.

@sptrawler Alas how true. OPM so much easier to operate with.

 

[Dona Ferentes]

this one didn't slip through.

In the last Senate meeting for 2024, Finance Minister Katy Gallagher tried to pressure crossbenchers Jacqui Lambie and David Pocock into agreeing to support one of the worst taxes ever conceived by an Australian Treasurer — the unrealised capital gains tax on superannuation.

Lambie and Pocock had vowed to act in the national interest and oppose it. They stood their ground. Thank you Jacqui. Thank you David.

 

[sptrawler]

this one didn't slip through.

In the last Senate meeting for 2024, Finance Minister Katy Gallagher tried to pressure crossbenchers Jacqui Lambie and David Pocock into agreeing to support one of the worst taxes ever conceived by an Australian Treasurer — the unrealised capital gains tax on superannuation.

Lambie and Pocock had vowed to act in the national interest and oppose it. They stood their ground. Thank you Jacqui. Thank you David.

Interesting, when you were just recently posting up about the impost the aged were putting on the broader economy.

 

[divs4ever]

Interesting, when you were just recently posting up about the impost the aged were putting on the broader economy.

and they will be , after all the super cash goes into under-performing projects/investments , and the super won't buy a tent over a homeless retiree ( mine when i liquidated it wouldn't pay the lease on a decent unit , thanks for managing it 12 years , guys )

 

[Bellcose]

this one didn't slip through.

In the last Senate meeting for 2024, Finance Minister Katy Gallagher tried to pressure crossbenchers Jacqui Lambie and David Pocock into agreeing to support one of the worst taxes ever conceived by an Australian Treasurer — the unrealised capital gains tax on superannuation.

Lambie and Pocock had vowed to act in the national interest and oppose it. They stood their ground. Thank you Jacqui. Thank you David.

That was one of two relating to superannuation which were not passed by the Senate. The one defining the objective of superannuation did pass (probably wasn't overly contentious.)

"5 The objective of superannuation

(1) The objective of superannuation is to preserve savings to deliver income for a dignified retirement, alongside government support, in an equitable and sustainable way.
(2) This section does not affect:
(a) the operation of any law of the Commonwealth (other than this Act or regulations made under this Act); or
(b) the operation of the governing rules (within the meaning of the Superannuation Industry (Supervision) Act 1993 ) of any superannuation entity (within the meaning of that Act); or
(c) any power, duty, right or liability of the trustee(within the meaning of that Act) of such an entity in its capacity as trustee."

Could make dipping into super to buy a house or have cosmetic dental work done more difficult. Lawyers meet at dawn 20 paces apart.

 

[qldfrog]

Today's AFR why would even a cent from a super fund go to a union?
abysmal
I am starting considering my own super fund SMSF

 

[Bellcose]

Today's AFR why would even a cent from a super fund go to a union?

It's been a bone of contention since the day dot. Now that industry superannuation funds are so large, the spotlight is being shone on their activities, including the amount of unlisted entities.

As was pointed out a few ages back AusSuper blew up over $1b of members funds by deciding to ride one unlisted private equity company into oblivion. It could be one of the problems is actually the amount of funds they have which is growing. What do you do with that amount of dosh in order to receive a decent return?

 

[mullokintyre]

The Australian Actuaries Institure comes avovel idea to just tax all earnings in a super fund at 10% regardless of age.
Although I would be adversely affected financially, I would probably go along with this.
No loopholes, no grandfather clauses, no capital gains relief etc etc.
Simplifies everything.
Mick
from Evil Murdoch Press

 

[Dona Ferentes]

The Australian Actuaries Institure comes avovel idea to just tax all earnings in a super fund at 10% regardless of age.
No loopholes, no grandfather clauses, no capital gains relief etc etc.
Simplifies everything.

but they'd tinker with it further down the track.

 

[qldfrog]

any change will only be to "close loopholes so scXw you further.we all know that, and i am not even retired officially as too young

 

[Bellcose]

The Australian Actuaries Institure comes avovel idea to just tax all earnings in a super fund at 10% regardless of age.

Actuaries come up with these proposals all the time. Hardly any of them get to the modelling cost/benefits stage by Treasury let alone make it to proposed legislation.

Nothing but thought bubbles.

 

[Bellcose]

I am starting considering my own super fund SMSF

I meant to reply to this aspect but forgot. Before commencing a SMSF, you may want to investigate if you have insurance through your current fund. Whether that aspect is or is not important to you I don't know. If it is, it may not be possible to obtain the equivalent with a SMSF.

 

[qldfrog]

I meant to reply to this aspect but forgot. Before commencing a SMSF, you may want to investigate if you have insurance through your current fund. Whether that aspect is or is not important to you I don't know. If it is, it may not be possible to obtain the equivalent with a SMSF.

I stopped insurance thru super so not important for me, but yes, could be a good point
If required, i could still keep a token super amount with the fund

 

[Bellcose]

I stopped insurance thru super so not important for me, but yes, could be a good point
If required, i could still keep a token super amount with the fund

I am with Australian Super and from what I have read TP cover ceases at age 65 and Death cover at 70. Neither is of any use to me so I opted out of insurance when I wound up the SMSF and rolled over the funds. I understand other industry funds have the same age limitations.

It's probably best for people to get advice on this as the documentation is a bloody nightmare and convoluted. Insurance aspects all seem so simple but that isn't the case in my opinion.

 

[qldfrog]

I am with Australian Super and from what I have read TP cover ceases at age 65 and Death cover at 70. Neither is of any use to me so I opted out of insurance when I wound up the SMSF and rolled over the funds. I understand other industry funds have the same age limitations.

It's probably best for people to get advice on this as the documentation is a bloody nightmare and convoluted. Insurance aspects all seem so simple but that isn't the case in my opinion.

You closed smsf and went into aus super while i am thinking doing the reverse..