Superannuation, the ultimate government cash cow?

[christianrenel]

IMO, Junior gave you a great reply.

The benefit of the putting money into your super, when you are 57. If you were to apply for government benefits such New Start or Disabiltiy Pension. Money inside the superannuation environment does not count towards the income and assets test until you reach Aged Pension age 67.

Puttting money into the super may increase your centrelink entitlements if you were to apply.

Kind regards


christianrenel

christianrenel@hotmail.com

 

[qldfrog]

Not a real surprise:http://www.brisbanetimes.com.au/queensland/queensland-may-raid-defined-benefit-scheme-surplus-20160524-gp27z5.html
non only do governments not put money aside, but they plan to actually take the amounts which was at a arm's length...
pathetic

 

[McLovin]

Not a real surprise:http://www.brisbanetimes.com.au/queensland/queensland-may-raid-defined-benefit-scheme-surplus-20160524-gp27z5.html
non only do governments not put money aside, but they plan to actually take the amounts which was at a arm's length...
pathetic

Presumably the state actuary is independent, so if they are saying fund is over capitalised why shouldn't the government take back the excess?

 

[qldfrog]

Presumably the state actuary is independent, so if they are saying fund is over capitalised why shouldn't the government take back the excess?

Where did you read about over capitalisation? based on projections as reliable as the next budget surplus, if all goes well, the amount might be sufficient.
the government just believe it could do better and spend the money in its own own project instead of having it invested as is currently the case; A robbery nothing else in my opinion

 

[McLovin]

Where did you read about over capitalisation? based on projections as reliable as the next budget surplus, if all goes well, the amount might be sufficient.
the government just believe it could do better and spend the money in its own own project instead of having it invested as is currently the case; A robbery nothing else in my opinion

Last year's budget papers showed that the State Actuary indicated the DBS surplus was in the range of $10 billion.

Is the State Actuary mistaken?

 

[qldfrog]

Is the State Actuary mistaken?

Read the rest..based on irrealistic projections IMHO and taking into account expected generous returns obviously not negative ones of course;
Unless you genuinely believe this amount would be topped up after a few negative return years if need be by the gevernment of the time;
The principle was to put aside money out of government reach to avoid what is going to happen.

And if Actuaries were always right, we would be saved by Reserve Banks actions...
Numbers like statistics tell what you want them to tell and i can not trust the integrity of any government employee as by definition, they always know who their masters are.
Same goes for corporate employees as well on specific domains.
Anyway, why should I care.

 

[sptrawler]

Here comes the pressure from Super Funds, to try and force SMSF, to be pushed into mainstream.

http://www.smh.com.au/business/bank...managed-financial-demise-20160609-gpfur3.html

 

[SmokeyGhost]

Personally, I don't give a damn about the SMSF Association. I didn't elect them to represent my SMSF and in any event, it was or may be still is, a group representing the financial advisers to SMSFs. If so, a slight conflict of interest there I believe.

As to the gist of the article, I do understand the concerns given the concessional taxation arrangements afforded SMSF's. I am slightly doubtful about the statement:

The only conclusion that can be drawn is many SMSF members are being funnelled into SMSFs by financial advisers or accountants who are not acting in their best interests.

The SMSF I administer commenced with less that the 'desired' amount at the time it was established but in a relatively short period was above that figure through persistence.

I have noticed over the years the professional superannuation funds industry have made many statements on its view that the Trustees of SMSFs do not have the appropriate expertise and should be brought under the management of the said industry. Again my view, but it's just talking its own book. I have no wish to be under their management. As at the end of last financial year, I calculated my "MER" was less than one-half a percent of assets. I see no good reason to increase that the SMSFs costs in order to fund the lease on their Ferraris.

My view also that the authorities squibbed on continuing to permit borrowing by SMSFs but then I have an aversion to debt where investments are concerned having seen way to many people go to the wall as a result of it.

I recall seeing another article by this author suggesting there be a fund established to compensate those who were hammered by investing in MIS. A lovely thought I suppose there was no proposal as to who should fund that compensation scheme but I certainly have no desire to fund the mistakes of others.

One thing should be made clear to all who wish to establish SMSFs or invest through other means and that is:

You are allowed to make mistakes and wipe yourself out financially as much as you are allowed to be successful. You will be signing the cheques so whatever your do it is you who must accept responsibility for your decisions whether or not financial advice is involved as that is all it is - advice. There is no requirement to act on that advice.

Then I am a little callous I guess.

 

[sptrawler]

One thing should be made clear to all who wish to establish SMSFs or invest through other means and that is:

You are allowed to make mistakes and wipe yourself out financially as much as you are allowed to be successful. You will be signing the cheques so whatever your do it is you who must accept responsibility for your decisions whether or not financial advice is involved as that is all it is - advice. There is no requirement to act on that advice.
.

I would say, there are just as many, if not more, wiped out by bad professional advice as personal decisions.

I think you summed it up well, smokey.

 

[qldfrog]

after my post of last month:
"I told you so..."
http://www.brisbanetimes.com.au/queensland/queensland-budget-treasurer-to-take-advice-if-public-super-goes-into-deficit-20160615-gpjpt6.html

 

[sptrawler]

I see Bill is prepared to help Malcolm hang himself.

https://au.news.yahoo.com/thewest/a/32033393/labor-throws-a-lifeline-to-pm-on-super-changes/

Apparently there has been a big backlash, by the LNP supporters, it will be interesting to see it play out.

 

[SmokeyGhost]

Well, it's a potential cash cow for some. Received advice recently, my SMSF has a cash component with an unlisted fund the units in which were redeemed some years ago. Appears an audit revealed they had inadvertently overcharged on fees.

Now, as the trustee structure has changed and so have the bank accounts, I'll be having some fun getting those funds out. Gotta lurve paperwork, especially when it should be unnecessary from my point of view. Such a minuscule amount in the context of things too which is even more annoying.

 

[SmokeyGhost]

Recently I have come across articles suggesting the Government amend its proposal to limit the amount of non-concessional contributions to superannuation to allow contributing as a result of events such as lottery wins, divorce settlements and inheritances. Hmm, probably stretching the friendship a little there as lottery wins are tax free I believe (wouldn't know as I have never, and never will, had one. I guess you have to buy a ticket in them. Bummer.)

I now see the Treasurer is adverse to amending the budget proposal and to allow lottery wins and inheritances to be included as exemptions to the non-concessional lifetime limit of $500k. Hope they hold the line on this one.

 

[Junior]

Recently I have come across articles suggesting the Government amend its proposal to limit the amount of non-concessional contributions to superannuation to allow contributing as a result of events such as lottery wins, divorce settlements and inheritances. Hmm, probably stretching the friendship a little there as lottery wins are tax free I believe (wouldn't know as I have never, and never will, had one. I guess you have to buy a ticket in them. Bummer.)

I now see the Treasurer is adverse to amending the budget proposal and to allow lottery wins and inheritances to be included as exemptions to the non-concessional lifetime limit of $500k. Hope they hold the line on this one.

I'm astounded at this suggestion....it seems really, really dumb to me. Who cares how the windfall came about? Just because someone wins lottery they get a higher contribution cap than everyone else? It's already tax free money, why should you get an additional boost from the government? Unbelievably stupid, and lacking in logic. Just work out how the NCC cap, or lifetime cap should work (and raise it a bit, and not make it retrospective), and leave the other proposals as they are.

If the government are saying a balance of $1.6mill is reasonable amount to have in super, why not just let everyone contribute until they can get to this level, regardless of their personal circumstances?

 

[SmokeyGhost]

I see your point, Junior.

I suspect the debate revolves around the situation where a person has already had an NCC.

My understanding is it is usually assumed an NCC is made with after-tax money, which may or may not actually be the case. So if somebody was fortunate enough to receive a windfall, such as a lottery win which is tax-free, and they had already made the $500k NCC limit, to permit an additional NCC seems rather over-the-top I feel.

However, if a person had NOT reached the $500k and had previously made, say, a $300k NCC, I don't see any technical problem in making a further $200K NCC from a windfall. I'm not aware that the super fund, or the ATO, currently check the source of the NCC funds. However, I don't have any expertise in these matters and others would know better than me.

As for the money from divorce, yeah, I can appreciate the suggestion for that exemption. Like others, I know of many who are divorced (of both genders) and, mainly women though, their retirement plans are well and truly in disarray. While I've never been in that situation, I do have a degree of sympathy and consider some arrangements should be considered. Just my view of things.

 

[Junior]

I see your point, Junior.

I suspect the debate revolves around the situation where a person has already had an NCC.

My understanding is it is usually assumed an NCC is made with after-tax money, which may or may not actually be the case. So if somebody was fortunate enough to receive a windfall, such as a lottery win which is tax-free, and they had already made the $500k NCC limit, to permit an additional NCC seems rather over-the-top I feel.

However, if a person had NOT reached the $500k and had previously made, say, a $300k NCC, I don't see any technical problem in making a further $200K NCC from a windfall. I'm not aware that the super fund, or the ATO, currently check the source of the NCC funds. However, I don't have any expertise in these matters and others would know better than me.

As for the money from divorce, yeah, I can appreciate the suggestion for that exemption. Like others, I know of many who are divorced (of both genders) and, mainly women though, their retirement plans are well and truly in disarray. While I've never been in that situation, I do have a degree of sympathy and consider some arrangements should be considered. Just my view of things.

Agreed re divorce. The system of caps per individual regardless of marital status should be considered. The example of a divorced woman who has a history of being a stay-at-home mum, ending up with bugger all in super and only the $500k lifetime cap at say 65 years old certainly needs to be addressed.

 

[SmokeyGhost]

Another random thought. One concept is to allow an exemption to the proposed NCC cap where accident compensation payment is involved. There are, and possibly will be, a number of cases where a payment is made which has a component for future medical care (I understand Medicare benefits are not supposed to apply in these circumstances) and another for loss of future income plus the award could be discounted by varying percentages if the court determines contributory negligence is involved.

Hmm, should one be allowed to make a NCC when one component is supposed to be used on an on-going basis for medical treatment of the condition(s) and be allowed to contribute when another component may be for loss of future income? All depends on the quantum of funds involved I guess but it'd be fascinating to see if the discussion paper even raises these matters and, if so, the arguments for and against.

 

[SmokeyGhost]

Hmm, well. Seems some have had their noses yanked out of the trough.

http://www.smh.com.au/business/bank...itors-struck-off-by-asic-20160823-gqz2w9.html

More than 100 SMSF auditors struck off by ASIC

More than 100 approved self-managed superannuation fund auditors have had their registration cancelled with the corporate watchdog after failing to file accounts in another blow to Australia's 'selfie' economy.

The Australian Securities and Investments Commission said in a statement on Tuesday it had struck off 133 SMSF auditors following a series of warnings

 

[sptrawler]

If the government are saying a balance of $1.6mill is reasonable amount to have in super, why not just let everyone contribute until they can get to this level, regardless of their personal circumstances?

That is the only sensible outcome,IMO, if you are going to put a cap on.
Most super accounts are heavily in favour of the male population, why would you cap what people can put in when it will mainly effect women.
What I mean is 90% of people with $1.6m will be men, so capping contributions to stop people attaining it, will affect mostly women.IMO
God knows where they get their logic from.

What you are suggesting makes far more sense.

 

[Bill M]

That is the only sensible outcome,IMO, if you are going to put a cap on.
Most super accounts are heavily in favour of the male population, why would you cap what people can put in when it will mainly effect women.
What I mean is 90% of people with $1.6m will be men, so capping contributions to stop people attaining it, will affect mostly women.IMO
God knows where they get their logic from.

What you are suggesting makes far more sense.

It is silly policy. Some people did actually plan to wait until final years before loading their super accounts for retirement. A typical example is my wife. Since the super guarantee, she had her employer put in around 100K over the last 26 years (low paid job). If she had savings from other sources like a investment property that she liquidates she can only put in 500K? A 600K super for a 30 year retirement? Not enough for sure, silly policy, should be scrapped or raised to $1.6 M as you suggest.