Superannuation (Super)

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red+black

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Jul 12, 2001
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I know there are a few old super threads in the Money forum, maybe we should have one "super Super thread"? Anyway, Mods can merge if they wish, whatever.

In the last 12 months I have started to take more interest in my super. And there are some changes 'thanks' to the last budget. I've started salary sacrificing (ie. pre-tax concessional contributions) and am enjoying watching my super grow. I can quickly go on to my super company's site and change my fortnightly contribution up or down as I need to.

With the changes to Pension Age (c/o both the ALP and LNP) and likely future changes to Preservation Age, we should all take a keener interest in our Super. Recently I've been doing some research and have managed to collate the information below:
Code:
SUPER GUARANTEE              CONCESSIONAL CONTRIBUTIONS CAP
---------------------------  -------------------------------
1/7/1996 - 30/6/1998  6.00%            60+   50+   49+   18+
1/7/1998 - 30/6/2000  7.00%  2007/08 $100k $100k  $50k  $50k
1/7/2000 - 30/6/2002  8.00%  2008/09 $100k $100k  $50k  $50k
1/7/2002 - 30/6/2013  9.00%  2009/10  $50k  $50k  $25k  $25k
1/7/2013 - 30/6/2014  9.25%  2010/11  $50k  $50k  $25k  $25k
1/7/2014 - 30/6/2018  9.50%  2011/12  $50k  $50k  $25k  $25k
1/7/2018 - 30/6/2019 10.00%  2012/13  $25k  $25k  $25k  $25k
1/7/2019 - 30/6/2020 10.50%  2013/14  $35k  $25k  $25k  $25k
1/7/2020 - 30/6/2021 11.00%  2014/15  $35k  $35k  $35k  $30k
1/7/2021 - 30/6/2022 11.50%
1/7/2022 -           12.00%
 
Last edited:

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crackerjack4X4

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Aug 3, 2007
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Want more control over your super?
Member Direct is AustralianSuper’s self-managed investment option. It’s designed for members who want more control and choice. You can invest in stocks in the S&P/ASX 300 Index, Exchange Traded Funds (ETFs) and term deposits – all from an easy-to-use online platform. In fact, the Member Direct option offers many of the features of a self managed super fund at a fraction of the cost.
http://www.australiansuper.com/inve...e/super-investment-choices/member-direct.aspx

I have 30% of my super in member direct at the moment selecting companies that pay good fully franked dividends, set and forget for the next 5 years.
 

Dan Moody

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Apr 3, 2007
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Due to people moving their money into smsf's the industry funds have created things like the Aussuper member direct platform. One big advantage of having a smsf is you can buy an investment property in it. You are unable to do that with a retail or industry fund.
Not really worth doing unless you have over $150k in your super due to the fees and charges associated with keeping a SMSF.
 
Aug 15, 2011
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How do i put all my accounts together? I think i have 3 through different casual jobs.

Which ones best for me?

I have little idea or understanding about this.

You also cant salary sacrifice on casual pay can you?
 

Jewbacca

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Dec 14, 2011
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How do i put all my accounts together? I think i have 3 through different casual jobs.

Which ones best for me?

I have little idea or understanding about this.

You also cant salary sacrifice on casual pay can you?

https://www.ato.gov.au/calculators-and-tools/superseeker/

Will get you started as far as finding any lost super accounts. If your address is still current with your various accounts you should receive statements periodically.

Once you decide which account you want to be your one account the provider will have a form you can fill out with details of your other accounts and they'll consolidate it on your behalf. You usually have to provide a certified (by a JP) copy of your ID.

It's worth remembering that you have investment options with most super accounts that are worth looking into (various risk options) and that the super account you use is completely up to you, employers can't force you to use a particular provider. I believe you can sacrifice on casual pay though i'm not sure you'd want to, usually as a casual the money is of more use to you now than in 50 years time.
 

red+black

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I started salary sacrificing in October, but just found out the deductions stopped in June. Is there any chance that deductions stop every June 30 and you have to let them know again every July? I've emailed them and am awaiting a response.
 

JohnW

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Oct 6, 2005
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Are you doing it through your payroll or a salary packaging organisation? In my dealings both employers and salary packaging organisations will keep making payments, unless they thought you could go over your limits.
 

red+black

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Good question. Pretty sure I just went through the website of my packaging organisation.

If I don't hear back from them on Monday, I'll call and ask some questions.
 

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RobV

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How do i put all my accounts together? I think i have 3 through different casual jobs.

Which ones best for me?

I have little idea or understanding about this.

You also cant salary sacrifice on casual pay can you?

You can consolidate all your supers online now, you sign up and link your ATO site to my.gov.au (same place tax is done now).

I have 2 super accounts, one is with MSBS which I am forced to use, but the 18% we get is pretty good :) and the other one is with REST from my woolies days which keeps growing despite the fact that no money is being put into it any more, which is why I'm keeping it.

I just used the my.gov.au site to consolidate my third super account into the REST account and will only be keeping 2 active. If I ever leave the ADF I will be going back to use REST as I rate them as one of the best (mind you I haven't had a lot of exposure to that many other funds so could be wrong).
 

Jordie_tackles

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I have 3 ATM my current one which is Australian super and is doing well ATM. The other two are REST and HOTPLUS which are historically good, any thoughts in my beat options here? Just don't know where I am best to consolidate them?
 

JohnW

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Oct 6, 2005
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All of them should be fine. No one provider is "better". It all depends on what you are chasing from a fund i.e. certain investment options, certain insurance options etc. If a fund suits your needs then stick with it. Make sure that you are aware of any insurance that could be lost by rolling out of an account, and make sure you are happy with losing it or replace it elsewhere before you lose it.

Generally most move their "dormant" account into the account that their current employer is paying into. This is the "easy" option as you don't need to ask your employer to change where they are paying to (although this isn't hard - Google superannuation choice form).
 

red+black

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Changes to the employer superannuation guarantee.

Currently at 9.50%, we were initially due for annual increases of 0.50% from now until 2019/20 when it would hit 12.0%. Then it was announced that the SG increases would be halted until 2018/19. Now they are on hold until 2021/22.

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Sep 4, 2005
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Due to people moving their money into smsf's the industry funds have created things like the Aussuper member direct platform. One big advantage of having a smsf is you can buy an investment property in it. You are unable to do that with a retail or industry fund.

I have a question for anyone who has a deep understanding of Investment property in a smsf.

SMSF owns a factory worth about $550k. Another $150k in cash.

The owner also has a business with personal debts secured by the family home.

The family home is worth approx $500k

The personal debt is approx 250k

The companies main creditor is the ATO of around $40k. Totalled with others probably $50k.

The value of the assests is debatable. But for the sake of a figure the sale of assets would cover the overdraft.

The business is slowing down and having high's and low's but ultimatly evens itself out and is not profitable. Costs are met but the debt is not decreasing.

The owner was born in 1956.

The accountnts opinion is to shut the doors, wind up, sell the home and wait for super to be released. Pretty much says ultimately the home would be lost as the debt is too large etc.

The owner would rather keep the home than the factoy. In simple terms (i know none of it is simple and I know * all) selling the factory for $500k could settle the $300k debt with $200k left over plus the $150k cash totally $350k and a owned home with no commitments.

Upon listening in to conversations yesterday the accountant was always saying he cant touch te factory until 65. Is it possible there are different conditions (I thought the age for release for anyone born prior to 1960 was 55)

The owner's priority above anyone else is he wants his home, he'd preffer not to move or be in rent. This position doesnt sit nicely. Lose home, move into rent or small unit yet the super has a value of approx $700k at aged 59.

Any feedback much appreciated or where to go for more opinions would be much appeciated. As I said current accountants position is wind up business, lose house and move. Bit of a dramatisation as the business can still go on and can either just stay the same or land a new contract.
 

JohnW

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The accountant may be thinking about "avoiding" CGT on the sale of the property? Selling it prior to age 60 may result in CGT being payable. Selling it after 60 (providing done the right way i.e. in pension mode) CGT may be avoidable. Not sure why he would be talking about age 65. If the bloke in the case study retires now he could obtain 180k of his super tax free, with tax being paid on the remainder (if withdrawn), after 60 and retired no tax payable on the withdrawal from super, over 65 you can withdraw with out having to retire.

Does the factory have a large capital gain?
If he plans on selling it and withdrawing the $$ prior to age 60 to clear the personal debt there will be more tax payable than if he can hold out to age 60. You would need to look at the taxable percentages of his fund to determine the tax payable if he withdrew all the funds.

My thinking may be that waiting out to age 60, selling the property, withdrawing enough to clear personal debt may produce the best outcome, it obviously depends on if its possible to wait to age 60. Again this is just based on the limited info provided so take it all with a grain of salt.
 
Sep 4, 2005
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Thanks, I know its hard to respond on limited info.

From memory the property was brought for approx $220-$240k. I cant remember exactly.

The last valuation was $550k
 

JohnW

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He would be paying roughly 31k in CGT if sold prior to age 60. Again some times a decision cant be made solely on the dollar's and cents. And the lifestyle etc has to be thought about.
 

red+black

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My employer has not paid 3 of my last 4 SG payments, HR say there has been some mix-up, but they are getting a bit narky with me asking them every couple weeks for an update. I'll give them 2 more weeks before I really escalate the matter.
 
Zim^zuM

Am a tax accountant...any advice is general advice yada yada yada...

Presumably there is a term on the personal debt and the business owner has a term to repay this.

Being born before 1 July 1960 enables you to access the preservation age condition of release.

So strategy could be 1 of 3 options:

(a)
  • Wind up business - hopefully this could be achieved easily without tax or cashflow consequences
  • Convert SMSF into pension mode
  • Sell commercial property
  • Being 100% in pension mode the Fund doesn't pay tax - however, if the contributions made into the Fund are mostly concessional (quite likely) then the member will pay tax on withdrawals from the Fund at marginal tax rates. Depends on other income and their own cashflow requirements as to what they should withdraw, but likely to come with some cost in the present
  • Once they turn 60, able to withdraw without paying tax personally

Strategies can get more complex than that, and taking a lump sum might be an alternative option, hence recommend speaking to someone who can assist with more specific advice

(b)
  • Wind up business
  • Seek salaried employment until 60 (or older) then look at undertaking the strategy presented in option a.
(c)
  • Continue operating business and look for other sources of non-term finance such as debt factoring (if they can afford it) to reduce other debts
  • Look to turn things around with new (i) sales strategies or (ii) cost cutting measures - impossible to tell if this could work with the limited info
  • Sell business at a time that suits, hopefully for a reasonable sum - this not relying on the commercial property to bail them out
As per above, would suggest they speak to someone (qualified accountant) for alternative opinion - who actually listens to what they want first and helps them achieve that.
 
My employer has not paid 3 of my last 4 SG payments, HR say there has been some mix-up, but they are getting a bit narky with me asking them every couple weeks for an update. I'll give them 2 more weeks before I really escalate the matter.

It is legislated that an employer must pay the most recent quarter's superannuation within 28 days of the end of the quarter, i.e. the July to September quarter is due on 28 October.

When you say 'SG Payments', do you mean that they haven't made the quarterly payments and are therefore 9 months behind?

Not paying superannuation on time is one of the first signs that a business is having cashflow issues and can be a sign of poor financial health. If it is that they're 9 months behind, it would be worthwhile making a point that you're not wanting to stir the pot and that you're simply looking after your own financial interests. You're within your rights to report your employer if this does not achieve the desired response.

Ultimately, a director of a business can be made personally liable for unpaid super so it's within the operator's interest to take care of the matter as soon as possible.
 

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