Exclusive list of 7 independent advisers, ban on trailing commissions and volume-based payments, super tax alert, contributions special, and more
Welcome to the APRIL 2011 edition of SuperGuide newsletter, a free and independent source of superannuation information for consumers.
The highlights of this month’s SuperGuide newsletter are:
- THE SOAPBOX EXCLUSIVE: ONLY 7 TRULY INDEPENDENT FINANCIAL ADVISERS IN AUSTRALIA. And SuperGuide has the list! Just over 12 months ago, we published a list of 14 truly independent advisers that triggered a lot of angst and controversy within the financial services industry. Guess what! The number of independent advisers has halved to 7. Rather embarrassing for the financial advising industry, and for the Government, which has just announced major financial reforms to improve the quality of financial advice. Click on the link below to discover the ‘group of 7?.
- FINANCIAL ADVICE REVAMP: BY THE SHORTEN CURLIES. On 28 April 2011, the Assistant Treasurer and Minister of Superannuation, Bill Shorten, made a brave and revolutonary announcement: he struck at the heart of the financial services industry money-making machine – by confirming the proposed ban on commissions and volume-based payments. Click on the link below to find out more.
- 2011 FEDERAL BUDGET 2011: WHAT ABOUT SUPER’S 4 FORGOTTEN ISSUES? In September 2010, I published a to-do list of 16 major superannuation issues needing action by the Federal Government post the Federal election. There are 4 items on my superannuation to-do list that no one within the Government seems willing to talk about publicly. Click on the link below to find out more.
- COUNT YOUR SUPER CONTRIBUTIONS OR EXPECT A TAX HIT. Now is the time to count your super contributions, if you want to ensure that you don’t exceed your contributions caps. Tens of thousands of Australians are expected to receive penalty tax notices for exceeding the concessional (before-tax) contributions cap. The halving of the contributions caps from July 2009, and the ridiculous and draconian penalties applying to contributions that exceed the caps has caused a lot of confusion and this confusion may end in costly tears. Click on the link below to find out what you can do about it.
- SUPER CONTRIBUTIONS SPECIAL. We have been inundated with questions about super contributions. Not surprising really, considering the Government is imposing ridiculous penalty taxes on anyone who inadvertently exceeds the contributions caps. The April edition is jam-packed with Q&As on contributions strategies, including non-concessional contributions, tax-deductible super contributions and taking advantage of the bring-forward rule. And don’t forget to check out our contribution survival guides on the home page of our website. Click on the links below to find out more.
- SUPER FUND FRAUD VICTIMS TO RECEIVE COMPENSATION. More than 5,000 Australians lost superannuation savings as a result of fraid from the collapse of trustee Trio Capital Limited (formerly Astarra Capital Limited). The Federal Government is set to compensate these Australians for 100% of losses suffered. Click on the link below to find out more.
- EX-ANSETT EMPLOYEES TO RECEIVE LONG-AWAITED SUPER BENEFITS. Around 11,000 ex-Ansett workers have been waiting nearly 10 years for superannuation entitlements to be paid out. Click on the link below to find out more.
- SUPER FUNDS DELIVER 5.6% FOR 12 MONTHS TO MARCH 2011. The median superannuation growth fund delivered 5.6% for the 12 months to 31 March 2011, and the median growth fund delivered an impressive 10.1% for the financial year to date (July 2010 to March 2011), according to rating company Chant West. Click on the link below to find out more.
Note: You can click on the links below or you can access the newsletter link directly via the SuperGuide website. Click here if you want to access the APRIL 2011 newsletter page via the website.
AUSTRALIAN INVESTORS’ ASSOCIATION NATIONAL CONFERENCE: I will be speaking at the AIA’s national conference in September 2011. The AIA is offering an early bird discount for anyone who books for the conference before 31 May 2011. You can find more information about the AIA conference here.
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Many thanks for your support and interest in SuperGuide.
And SuperGuide has the list, again! In February 2010, we published a list of 14 independent advisers which triggered much controversy and angst from the financial services industry, and from SuperGuide readers. Well, SuperGuide is at it again, and the number of truly independent advisers in Australia has halved – to 7!
On 28 April 2011, the Assistant Treasurer and Minister of Superannuation, Bill Shorten made a brave and revolutionary announcement: he struck at the heart of the financial services industry money-making machine — by banning commissions and volume-based payments. This day has finally arrived and for commentators who have called for these changes for many years (including myself), it is still tempting to ask: why did it take so long? The historic analysis can wait for another time.
This article is a must-read if you make contributions to a super fund, in addition to your employer’s compulsory Superannuation Guarantee contributions. Hundreds of thousands of Australians who are making a serious effort to save for retirement are expected to receive a financial shock after the financial year ends in June 2011.
In September 2010, I published a to-do list of 16 major superannuation issues needing action by the Federal Government post the Federal election. I published this list in the form of a public memo, as a helping hand for the newly appointed Minister of Superannuation, Bill Shorten.
The median superannuation growth fund delivered 5.6% for the 12 months to 31 March 2011, although the median growth fund has delivered a more impressive 10.1% for the financial year to date (July 2010 to March 2011), according to rating company Chant West.
If you’re a member of one of the super funds listed below, then you need to read this article: Astarra Superannuation Plan; Astarra Personal Pension Plan; My Retirement Plan, including subplans – Seagrims Retirement Plan, TIC Super, and Titanium Retirement Fund; Employers Federation of NSW Superannuation Plan.
Remember Ansett Australia airlines? The airline company collapsed on 12 September 2001, the day after terrorists flew planes into the twin towers of the New York World Trade Centre. The two events however were not related.
Q: If I have retired from work and later on inherit a reasonable sum of cash, can I make a non-concessional contribution into my superannuation fund? OR is that only permitted while I am working, regardless of my age?
Q: I was born in May 1961 (turning 50 in May 2011). Can you explain which financial year I am considered to be over 50 in relation to the $50,000 concessional contributions cap?
Q: Thanks for your website and advice. Just a quick question: I turned 65 in January 2011. So I am 64 years of age for a large part of the 2010/2011 financial year, but of course I turned 65 during the 2010/2011 financial year, that is, in January 2011. My understanding is that because I am under 65 for part of the 2010/2011 financial year then I can exercise the bring forward provisions and make non-concessional contributions up to $450,000 before I turn 65, if I choose to do so. Is this correct?
Q: Under the 2-year bring-forward of non-concessional contributions, if a person makes a contribution of $150,001 when age 64, he can continue to contribute the balance of the $450,000 anytime during the next 2 years without having to satisfying the work test, is that right?
Q: If you turn 65 and retire after 1 July 2010, can you still make the $450,000 bring-forward non-concessional contribution as long as it’s before 30 June 2011? Or do you have to satisfy the work test to do so?
If you’re self-employed or not employed, you can claim a tax deduction for your super contributions. An individual under the age of 18 however can only claim a tax deduction for super contributions when his or her income comes from gainful employment, such as carrying on a business.
Q: Could you lead me to a link where I could find a generic S290-170 notice of intent to deduct? It would be great to have a generic list of forms that would assist self-managed super fund (SMSF) trustees.
Q: Since July 2009, salary sacrificed super contributions count towards the co-contribution income test. Was there a similar change made in relation to the income test that applies to concessional contributions when claiming tax-deductible contributions? My understanding is that the income test applicable for making tax deductible (member) contributions is that the member’s assessable income plus reportable fringe benefits from eligible employment must be less than 10% of their total assessable income from all sources. Is that still the case?
Tax-deductible super contributions: timing the start of pension is essential
Q: Can you tell me if the rules regarding tax-deductible contributions changed on 1 July 2007? I put money into my SMSF in June 2010 from a capital gain. I wasn’t able to tell the fund at that time what it was for as my accountant hadn’t completed the figures so that notice was sent to them in April 2011.
Q: I have my own super fund and when it came to the end of the year I was supposed to withdraw $6,544. I only withdrew $6000 and can catch up this year. Is this a reportable breach to the Tax Office?