The unfortunate truth about Australian politics is that both major parties tend to look after their supporters with the most influence, sometimes to the detriment of others. For the Liberals big business gets preferential treatment, as was evidenced by its Work Choices legislation, while the Labor party supports the unions. The recent super changes introduced by the Labor party are examples of small business owners and the self-employed being disadvantaged and ignored to the benefit of union members. Increasing the superannuation guarantee charge from 9 per cent to 12 per cent, without requiring this increase to be taken into account in future wage case decisions, will increase the operating costs for small businesses already struggling financially. The self-employed, who for …

Over the past 28 years the one constant for superannuation has been change. It has unfortunately too often been viewed by governments as a cash cow that can be milked whenever it needs to balance the budget. The recent changes announced by the Gillard government have continued this tradition. In fact since 1983 the trend has been for the Coalition to mainly increase and improve super benefits while Labor has increased tax on super and reduced benefits. During the Hawke/Keating era the 15 per cent tax on both contributions and the income of a super fund were introduced. This meant Australia was the only country out of a list of 10, including the UK and the USA, which taxed contributions, …

The passing by both houses of parliament of the carbon tax legislation has created a great deal of interest and controversy. By the responses received to last week’s news of the increase in the superannuation guarantee levy to 12 per cent, this move is no less contentious.  Q. Has legislation also been passed to lift the tax rate to 18 per cent on super as well? A. To the best of my knowledge neither party has as a policy to increase the tax on super contributions to 18 per cent. Given Tony Abbott’s opposition to the tax concessions for super, and his preference for the Age pension, it will be interesting to see what superannuation policies the coalition comes out …

Legislation was introduced into federal parliament this week to increase compulsory employer super guarantee contributions from 9 per cent to 12 per cent. This will be done in small increments over the next seven years if the legislation passes both houses of parliament. As part of the legislation the current age limit of 75 for making super contributions would be removed. Q. In the event that an employer fails to comply with the super guarantee rules and a penalty is applied, where does the extra money go? A. The administration charge of $20 per employee, when an employer does not meet their superannuation guarantee responsibilities, is a fee retained by the Australia taxation office. The interest charge that forms a …

There are many strategies that can be used to increase your retirement investments. One of them is to start a Transition To Retirement pension from a super fund and salary sacrifice extra super contributions.  Q. I work full time and will be 65 next August.  My super company wants me to put most of my salary into super before I hit 65 and then draw off that for living expenses.  Is this a good idea or would I be better off starting a self managed fund?  A. Starting a TTR pension when you are 60 can make a great deal of sense. This is because as the pension you receive is tax free you will be able to sacrifice more …

Nearly all industries have some form of awards night. The TV industry has the Logies, the movie industry has the Academy Awards, and the superannuation industry has the fund of the year awards that were held on Monday this week. Given that all working Australians have contributions made on their behalf by their employers, and that if they want to have a reasonable lifestyle in retirement the performance of their super fund is vitally important, it is a shame that more people are not aware of the awards or the company that decides them. SuperRatings  is a company that researches and rates Australia’s industry and commercial superannuation funds. It was started in 2002 by Jeff Bresnahan whose early career was …

There are many reasons apart from cost savings that people set up self managed super funds. Being in control of your own financial destiny, not having to deal with a slow moving bureaucracy, and having direct investments in a super fund, are three of the other major reasons. Q. Is it possible to set up a Self Managed Super Fund, so I can reduce the management costs I currently pay, and shift the money I have in my current super fund even after retirement? If so what is involved in setting up an SMSF? A. An SMSF can be set up at any time, and funds held in another superannuation fund rolled into the SMSF, no matter what the age …

It is common for someone to have different types of superannuation funds over their working life. When someone is starting off and they do not have a great deal in superannuation some of the cheaper no-frills options can be best. As a person gets older and accumulates more in superannuation, a more expensive but flexible superannuation fund is chosen. The best way I know of comparing the four options available is to stress the point that a superannuation fund is an investment vehicle. Just like the choices a person faces when selecting the make and model of car they own, the defining features of the different types of superannuation funds are very similar. MySuper accounts These accounts will be offered …

There are four main conditions that a super fund must meet to be classed as self managed. They are no more than four members, each member must be a trustee or a director of a trustee company, no member can be an employee of another unless they are related, and trustees cannot be paid for performing their duties. In addition to these requirements, and not counting all of the other superannuation rules and regulations, there is another requirement relating to the central control and management of an SMSF. Q. I currently live in New Zealand with my partner. We have about $800,000 invested in Australian shares and are thinking of a permanent move to Australia. I am 62 and my …