February 2013 Newsletter

Tax-free super saved, Top 10 funds, double-digit returns, SMSF pensions, MySuper and more

Welcome to the FEBRUARY 2013 edition of SuperGuide newsletter.

In this edition you can read about:

  • TAX-FREE SUPER FOR OVER-60s TO STAY, PROMISES PM. With rumours abounding about the removal of tax-free super for over-60s, the Prime Minister, Ms Julia Gillard has been forced to publicly commit to retaining tax-free super. The greater damage caused by these leaked gee-whiz policies is the lack of confidence in superannuation as a safe and predictable retirement vehicle. Click on the article link below to find out what tax-free super actually means, and what superannuation industry group is suggesting that tax-free super benefits should be capped.
  • RETIREMENT: BABY BOOMERS IN DENIAL, SAYS STUDY. Australian baby boomers are underestimating how much they will need for retirement, even though they have high expectations for their retirement lifestyle, according to a recent industry survey. Click on the link below to find out more.
  • TOP 10 PERFORMING FUNDS FOR 2012 YEAR, AND FOR THE PAST DECADE. The top 10 super funds for the 2012 calendar year, and separately, the top 10 super funds for the past decade are… you’ll have to click on the link below to find out. In separate articles, you can also discover that 2012 delivered double-digit returns for most super fund members, and a strong performance is expected for the 2013 financial year.
  • ASSET CLASSES: NAMING THE INVESTMENT WINNERS FOR 2012 CALENDAR YEAR. Click on the article link below to find out the winners and losers in investments. In a separate article, you can find out why SMSFs have outperformed large funds in 3 years out of 5.
  • MY SUPER: COMING TO A SUPER FUND NEAR YOU. Did you know that from January 2014, your employer’s super contributions may be going to a new super fund, known as a MySuper product, while your old super account continues to exist? Your super fund hasn’t told you yet? Click on the link below to find out what is going to happen to your super benefits.
  • FEE HIKE FOR SMALL SUPER ACCOUNTS. If you have less than $1000 in your super account, or you have children or grandchildren with part-time jobs (or starting their first full-time job), then you will be very interested in this article.
  • SMSF PENSION PAYMENTS: A LITTLE BIT UNDER IS OK. SuperGuide often receives questions from readers asking what happens if they don’t withdraw the minimum pension amount required to be paid each year from their pension account. In the past, the consequences were severe but now, since January 2013, the ATO shows leniency. Click on the link below to discover when underpaying your minimum pension amount is OK. In a separate article, we explain how superannuation pensions work, in particular, how the minimum pension payment rules work.
  • SMSF ALERT: NEW TRUSTEE DECLARATION NOW AVAILABLE. In late 2012, the Australian Tax Office undertook a review of the SMSF trustee declaration and made significant changes. If you’re a SMSF trustee, then this article is a must-read. Click on the link below.

You can find these articles and more by clicking on the article links below.

COMING UP!

2013 FEDERAL ELECTION AND SUPERANNUATION: In the MARCH 2013 edition, find out what the political parties are promising in terms of superannuation for the 2013 Federal election. We will continue this coverage throughout the year and distinguish rumours from facts, and explain the financial implications of any change to existing superannuation policies.

AGE PENSION CHANGES. In the MARCH 2013 edition, we will be reporting the increases to the Age Pension rates, including changes to the deeming rates for financial investments, and increases to the thresholds for the income and assets tests for Australians seeking a part Age Pension.

Thanks again for your support and interest in SuperGuide.

Trish Power

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February 2013 Newsletter   Super Guide

THE SOAPBOX

Tax-free super for over-60s to stay, promises PM

In late 2012, the federal government dropped a potential T-bomb (that is, a tax bomb) and fuelled the rumours that tax-free super benefits were to be removed for over-60s. The rumours fizzled out when the government realised it would be political suicide to remove the tax-free status of retirement benefits, and for not much financial reward. Read more

FEATURES

Retirement: Baby boomers in denial, says study

Australian baby boomers are underestimating how much they will need for a comfortable retirement, even though they have high expectations for their retirement lifestyle, based on a survey conducted by super fund REST Industry Super. Read more

MySuper: coming to a super fund near you

If you believe the federal government’s public relations campaign, MySuper will deliver the equivalent of nirvana in superannuation – low fees, strong investment performance, financial security and a worry-free retirement. Pardon? You haven’t seen the government’s MySuper publicity campaign? I am not surprised because there is not one skerrick of public information designed for consumers explaining what MySuper means for individual fund members. Read more

Retirement and tax: What are the minimum pension payment rules?

Q: I am 63. I want to retire next year but I am not sure if I want to access my super benefits yet. I have heard that when I retire, I must withdraw some super benefits each year, otherwise I won’t receive tax-free super benefits. Can you please clarify the rules for me? Read more

Fee hike for small accounts

If you have less than $1000 in your super account, or you have children or grandchildren with part-time jobs (or starting their first full-time job), then you will be very interested in this article. From 1 July 2013, the Federal Government is abolishing the ‘member protection’ rule which protects small super accounts (account balances of less than $1,000) from being rapidly eroded by fees charged by super funds. Read more

INVESTMENT PERFORMANCE

Top 10 performing super funds for 2012 calendar year, and for past decade

Investment returns for the growth investment options within super funds ranged from a high of 16% through to a low of 9.7%, according to figures released by rating company Chant West. Read more

Asset classes: Naming the investment winners for the 2012 calendar year

Australian and global listed property sectors delivered the biggest returns for the 2012 calendar year (1 January 2012 to 31 December 2012). The strong performance of super funds during 2012 however was driven primarily by the Australian and international share markets. Read more

Super funds gain 10.9% for year to date (and 2.6% for January 2013)

The median superannuation growth fund gained 2.6% in value for the month of January (and 10.9% for the first 7 months of this financial year), with shares and listed property being the star asset classes. Read more

Super funds gain 12.7% for 2012 year (12 months to December 2012)

The median superannuation growth fund gained 12.7% in value for the 2012 calendar year, and the median fund is sitting on a promising gain of 3.5% for the 3 months to December 2012. Read more

SELF-MANAGED SUPER FUNDS

SMSFs outperform large funds 3 years out of 5

A common argument put forward against individuals starting a self-managed super fund is that budding SMSF trustees could lose their hard-earned super savings through and inexperienced investing, and bad investment decisions. Until recently, there wasn’t much evidence confirming or denying this ‘world view’ mainly proffered by the large super fund sector. Read more

SMSF pension payments: A little bit under is OK

SuperGuide often receives questions from readers asking what happens if they don’t withdraw the minimum pension amount required to be paid each year from their pension account, especially when the underpayment is due to an honest mistake, or due to circumstances beyond their control. Read more

SMSF alert: New trustee declaration now available

In late 2012, the Australian Tax Office undertook a review of the SMSF trustee declaration and the associated fact sheet (Self-managed super funds – key messages for trustees), and made significant changes to both documents. Read more