Cooper review declares war on retail funds/financial advisers, cheapest super funds ever!, free SMSF education tool, exclusive survey results and more
Welcome to the April 2010 edition of the SuperGuide newsletter, a free and independent source of superannuation information for consumers.
The highlights of this month’s SuperGuide newsletter are:
- THE SOAPBOX: COOPER DECLARES WAR ON RETAIL FUNDS AND FINANCIAL ADVISERS. The Super System Review’s latest report calls for the introduction of a no-frills super account (MySuper) and the banning of entry fees and trailing commissions. The retail fund sector and financial advisers will not be happy. Trish explains what the report means for Australian consumers. Click on the link below to find out more.
- SUPER FEES: HOW MUCH SHOULD A SUPER FUND CHARGE YOU? The Super System Review is on a roll. Mr Cooper reckons super fund fees can drop to one half a per cent if the MySuper account becomes the new default super option. This will certainly be a challenge when some Aussies are paying more than 2% of their account balance in annual super fees. Trish digs deeper into the detail and discovers the current fee story is not as rosy as Mr Cooper would like it to be. Click on the link below.
- EXCLUSIVE: NICRI SURVEY RESULTS EXPOSE TOP SUPER BEEFS. Click on the link below to find out more.
- FREE SMSF EDUCATION TOOL: TAKE YOUR 60-MINUTE REFRESHER. Three major accounting bodies have pooled resources and developed a nifty online education tool for SMSF trustees. And it’s free. Click on the link below to find out more.
- HOW MANY FINANCIAL ADVISERS ARE THERE IN AUSTRALIA, REALLY? Click on the link below to find out the answer.
In this month’s newsletter, you also can read about whether all industry super funds are the same, the tax surprise for some SMSFs, paying SG for overseas workers, how old do you have to be to access super benefits, and plenty more Q and As.
MAY 2010 BUDGET EDITION: Expect your May 2010 SuperGuide newsletter on 12 May 2010, and regular website updates in the days following. I will be in Venice, Italy when the Federal Budget is released on 11 May 2010, but I can promise you this will not affect the commentary you receive on any superannuation-related announcements. I will be working through the night (Australian time) to ensure that SuperGuide readers have the latest Budget-related super changes (if any – joke!) in your in-boxes on 12 May 2010, and additional commentary/news on the website in the days following. The last time I was in Venice (2006), the Australian Government announced tax-free super for over-60s. In 2008, I was holidaying in Europe when the Global Financial Crisis hit. If the history of radical news coinciding with my recent overseas holidays is any indicator, I’m ready for any super shocks or surprises (or perhaps the Government may take it easy being an election year). What do you think will be announced in the May 2010 Budget (although it’s official name is the 2010/2011 Budget)?
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THE SOAPBOX: Cooper declares war on retail funds and financial advisers
The Super System Review chaired by Jeremy Cooper has gone back to basics for our future super needs: no frills, lower fees and no more commissions leading to the inevitable, slow death of the financial adviser/retail fund love-in.
Super fees: how much should a super fund charge you?
The Super System Review (SSR) panel, in particular, chair Jeremy Cooper, has drawn a line in the sand and publicly stated that the SSR believe it’s possible to reduce the fees charged by super funds to a mere half a per cent, or even less. Go Mr Cooper!
Exclusive: NICRI survey results expose top super beefs
During March 2010, the National Information Centre on Retirement and Investments (NICRI) ran a fact-finding campaign (‘Super March’) to discover what Australians thought about superannuation. SuperGuide supported the campaign and we encouraged our readers to contact NICRI with any concerns about the super system (see Do you have a beef about super? We’re listening).
Free SMSF education tool: take your 60-minute refresher
If you run a self-managed super fund (SMSF), or you’re considering running a SMSF, then I recommend you check out a fantastic, and free, online SMSF trustee education tool. The tool, called the ‘Self Managed Superannuation Fund Trustee Education Program’, was launched in late-March 2010, and developed by three Australian accounting bodies.
How many financial advisers operate in Australia?
Q: I’m desperately looking for information on an approximate breakdown of how many Australian financial advisers are part of a dealer group, and how many are operating by themselves as individual businesses. I’ve asked ASIC, FAA and the FPA and I can’t get an answer.
HOW SUPER WORKS
Super for beginners, part 13: Why pick one industry fund over another?
Q: I know that industry super funds generally have a good performance – particularly because of low fees, but I wondered, what is the benefit of picking one for your particular industry? I understand how people in some industries may have similar needs but is that really true these days in terms of the distinct benefits that an industry fund offers?
Superannuation Guarantee: Do we have to pay SG for overseas workers?
Q: We have a girl working for us who is on an English working visa. She doesn’t have super at home in England but do we have to pay her super while she is working for us? If yes, how do we go about it?
Preservation age: I’m 58. Can I withdraw my super benefits?
Q: Can you please tell me whether I can withdraw my super benefits when I retire at age 58?
SMSF pensions: Watch out for a surprise tax bill on fund assets
Q: My question is about taxation within super when a member dies. We are two members in the one SMSF, both drawing pensions. We have nominated each other as reversionary beneficiaries and benefits are to be paid to our legal estate in case the nominated reversionary beneficiary dies before the pension member.
SMSFs and life insurance
Q: I am a self-employed businessman with my own DIY super fund. I would like to know if I can arrange insurance(s), for example, death, etc through my fund with the premiums paid from the fund?
Q and As
Super for beginners, part 12: I claimed my super due to hardship. Why do I have to pay tax?
Q: I’m 30 years old. In 2009, I claimed $5,000 of my super due to financial hardship – I suffered illness, and was not able to work. I only received $3,950. Will I get the balance back, since I haven’t worked since 2010?
Age Pension: I have moved states. Do I get the same amount of pension regardless of where I live?
Q: I have read in a local newspaper that Age Pension rates have increased. I recently moved from New South Wales to Queensland. I am anxious to know if the Age Pension increases are for ALL Australians. Can you help?