23rd Jan 2019
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Super outlook grim after horror end to 2018
Author: Janelle Ward
super fails

Money in the bank is unlikely to be earning you much and the outlook for super in 2019 is also grim – and that’s on the back of sharp declines last month that pushed many funds into negative territory for the year.

Data released yesterday by superannuation research house SuperRatings shows that major fund categories all suffered declines in December to end a horror fourth quarter.

The median return for the balanced option in December was -1.2 per cent, contributing to a loss of nearly five per cent for the quarter (-4.7 per cent) but keeping members just above water for the year, with a gain of 0.6 per cent, SuperRatings reports.

Members in the median growth option or exposed solely to domestic or international equities were not as fortunate. Growth option members suffered a -1.7 per cent decline in December and -0.3 per cent for the year, as heavy losses in the fourth quarter clawed back earlier gains. Members in the median Australian shares option experienced declines of -0.9 per cent in December and -3.4 per cent for the year, while the median international shares option recorded a loss of -3.9 per cent for December and -1.7 per cent for the year.

SuperRatings executive director Kirby Rappell said that while the latest data will be a cause for concern for many super members, it’s important to keep a long-term perspective.

“For many super members 2018 will be remembered as a turning point”, said Mr Rappell. “Volatility is likely to be a feature of markets over the coming months and members can expect ongoing fluctuation in returns.

“However, it’s important to keep a long-term perspective and recognise that super returns have been overwhelmingly positive over the last decade.”

Despite the declines, super members remain well ahead over a 10-year period, with $100,000 invested in the median balanced option in December 2008, now worth $204,264. The same sum in the median growth option over the same period is worth $215,051.

Those invested in domestic and international shares have performed even better over the last 10 years, says SuperRatings, despite a more volatile 2018. An investment of $100,000 in the median Australian shares option in 2008 is now worth $227,120, and in the median international shares option, it would be $233,166. Meanwhile, $100,000 invested in the median cash option 10 years ago would be worth only $130,306.

As we enter a more challenging investment environment, the importance of reviewing your superannuation fund to ensure it is in line with your retirement objectives is paramount.

Chant West senior investment manager Mano Mohankumar also stressed the importance of looking long-term.
“Leading in to 2018, the median growth fund had averaged close to nine per cent return over the previous nine years, so a flat or negative year was on the cards,” he told Fairfax Media.

He said the best-performing funds had relatively higher allocations to unlisted assets – including strong-performing sectors such as infrastructure, property and private equity – rather than shares.

Meanwhile, new research from Roy Morgan confirms that industry funds would be the net winners from the Productivity Commission’s (PC) recommendation for a short-list of top-performing funds.

The research, released yesterday, revealed that over the six months to November last year, eight of the top 10 performing funds, based on member satisfaction with financial performance, were industry funds, led by Catholic Super with 70.5 per cent, followed by UniSuper with 69.7 per cent.

The only retail funds to make it into the top 10 were ASGARD with 65.1 per cent and Macquarie with 63.7 per cent.

The Roy Morgan analysis found the five major retail superannuation funds had an average satisfaction rating of 54.7 per cent, well below the industry fund average of 61.8 per cent.

“The best performer among the majors was Colonial First State with 60.7 per cent, well ahead of second placed BT (55.6 per cent). The lowest satisfaction among these majors was for AMP with 50.4 per cent and it was in fact the lowest of all the funds reported on in the Superannuation Satisfaction Report,” the Roy Morgan analysis said.

Is your confidence in your retirement income suffering? Do you have a plan C?

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    COMMENTS

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    Adrianus
    23rd Jan 2019
    7:48am
    “However, it’s important to keep a long-term perspective and recognise that super returns have been overwhelmingly positive over the last decade.”

    Not in my opinion. The results are very disappointing. The more one focusses on the long-term results the more depressing they look.
    inextratime
    23rd Jan 2019
    11:35am
    How long-term ? When you reach a certain age long-term may not be an option !!
    Greg
    23rd Jan 2019
    11:41am
    inextratime - exactly, these "superannuation people" always say "Look at the long term, it will get better over the long term, just hang in there", but some people don't have long term to go.
    Adrianus
    23rd Jan 2019
    4:52pm
    That's right, some of us are buying only ripe fruit. Either short term or long term the declared rate of return appears to be missing some cream? I only order my latte with skimmed milk.
    OnlyGenuineRainey
    24th Jan 2019
    6:57am
    Another powerful reason why the universal pension is essential. The assets test change forced people to draw down more to live on. When you have to constantly draw down to support yourself, you are forced to cash in at low prices. You can't wait. Those with lower asset balances but little or no aged pension can't afford to hold extensive cash for living expenses. We are continually being beaten over the head with accusations that the elderly are costing the nation too much, but continually facing changes in rules that force more of us onto pensions, and then told to hang on to assets for the ''long term'' when clearly that's utterly impossible!

    BTW. I read yesterday that an independent study of the ALP's franking credit proposal will impact over 1.1 million Australians - not the previously estimated 680,000. And over 400,000 of those who will suffer are members of APRA funds. And those 400,000 probably don't know they will suffer loss and won't know until the first report after the legislation is passed (if it is passed). And asked to discuss concerns that the proposed policy breaches good public policy guidelines on four critical points, Chris Bowen's response was 'No Comment'. How on earth can ANYONE vote for a politician who displays that kind of arrogance and disrespect? Given that the LNP are worse, what hope is there for this nation. Maybe we should be thankful that we don't have any 'long term' to look forward to!
    TREBOR
    24th Jan 2019
    7:57am
    Bit early and not feeling that well, Rainey - you are totally correct - drawing down assets to live is cruel and unconscionable - people generate a few assets in life in the hope they can enjoy retirement - not have to sell it all off to eat.

    And your point about it being a 'buyer's market' is absolutely true, and links in with what I said below about smaller SFRs flooding the market to get out in a climate of fear, giving the vultures the opportunity to sweep them up for peanuts.

    Doesn't help anyone in any way except those 'at the top' (self-proclaimed), and soon we may see no small shareholders, and shareholding will become once again the province of the rich only, at a time when jobs are at a premium. What a wonderful outcome from fifty or so years of bad government here - three hundred or more years backwards.

    Vote for no politician who wants to chop- back your retirement funding.... don't worry about the 'big boys' - they'll just sit down with them over a nice tax payer funded dinner and talk to them to get what they want...

    Make your vote count - don't vote for traitors, thieves and liars.

    Stop The Votes!

    Lock The Gates!
    SFR
    24th Jan 2019
    8:01am
    FACT CHECK.
    The Australian Prudential Regulation Authority (APRA) is an independent statutory authority that supervises institutions across banking, insurance and superannuation, and is accountable to the Australian Parliament
    APRA was established by the Australian Government on 1 July 1998 following the recommendations of the Wallis Inquiry into the Australian financial system. Prudential regulation is concerned with maintaining the safety and soundness of financial institutions, such that the community can have confidence that they will meet their financial commitments under all reasonable circumstances.

    APRA oversees:

    authorised deposit-taking institutions (such as banks, building societies and credit unions)
    general insurers
    life insurers
    friendly societies
    private health insurers
    reinsurance companies, and
    superannuation funds (other than self-managed funds).
    Adrianus
    24th Jan 2019
    9:25am
    Rainey was making the point that APRA regulated funds will be affected by Bill Shortens discriminatory franking credit policy. And that some who think they may not be affected should think again.
    OnlyGenuineRainey
    24th Jan 2019
    12:08pm
    Okay SFR, since you want to be picky and pedantic, I should have said 'APRA-regulated' or 'APRA-approved Funds'. I think most readers would have read it that way anyway. The meaning was quite obvious.
    SFR
    24th Jan 2019
    6:42pm
    You Are ASS-U-Ming. This site has many members of questionable intellect, just look at how many believe Shorton will save them.
    If you keep making assumptions like this one you may get a job as one of the writers on this site.
    OnlyGenuineRainey
    25th Jan 2019
    7:41am
    Okay, you have a point there. There are a few who think Short-on is going to fix the mess. There are quite a few who actually believe the lies the ALP tells. Sad, isn't it? But what is much sadder is that we don't have any better alternative.
    Kram
    23rd Jan 2019
    11:24am
    The returns change dramatically whey fees are applied. Just following the Index will provide the best sustainable return over the longer period. The only 2 factors an investor can control are the fees paid and where the funds are invested.
    TREBOR
    23rd Jan 2019
    12:21pm
    Hmm... fees.. fees.. charges.. extra costs.... hmmmmm.......

    Captive audience - no matter how badly the fund performs, its operators still get their healthy cut....

    Now if we had a universal one-roof fund ..... investing in genuine future productive infrastructure projects for this nation (which may include some development of resources offshore somewhere) via loans to government and other bodies based on a performance basis and with cast-iron contracts....

    Think of the 'water harvesting that could occur - but then - we've discussed salinity in the Great Artesian Basin, haven't we? Pump endless gigalitres of water into it and produce stuff..... and the salinity will rise as it does in WA and the Murray and environs....

    You all DO realise that water taken from the GAB has already a content of salt??? Cowsnsheep can handle it better, but still.... Buggar.... open Lake Eyre to the sea..... changed micro-climate and weather patterns...... an Annual Breakers to Bourke Barefoot Water Ski Event.... (aka croc fishing using politicians)....
    Grateful
    23rd Jan 2019
    12:23pm
    Kram. My very issue with super, "returns change dramatically, as most of the hard earned money goes into punting on share markets and you only have to see the massive volatility that they have had and will continue to have to see why hard earned super should NEVER be invested in such products with so much volatility and risk.
    Kelly O'Dwyer, who is now leaving parliament is the only one who got it right and that is for all funds to be man,aged by ONE manager, the Australian government Future Fund, with Peter Costello at the helm. All funds to be government guaranteed and with minimal charges deducted from earnings.
    People would buy units in the Fund at a set fee and the amount of units you held on retirement entitled you to a CERTAIN regular AND GUARANTEED income for life, with an option to take out a very small percentage of your total entitlement in cash for a bit of a splurge if you think you've earned it.
    See how far that goes with the effect that it would have on the top end of town and also unions.
    TREBOR
    23rd Jan 2019
    12:46pm
    One Fund - with the Future Fund rolled into it, and without Cost-a-lot.... sorry 'bout that - any man who oversaw the theft of $130Bn from the national treasury toe an offshore tax haven to ensure the perpetual feeding at the trough of politicians and their chosen mates, no matter how much devastation they visit upon this nation, is not a good person to run such a show.
    TREBOR
    23rd Jan 2019
    1:43pm
    Oh - Grateful - don't forget 'indexed' - a retirement package bought must be indexed or it rapidly loses value. Say a retiree bails out at 60, takes super pay .... what if he/she lives to 90, by which time $80k a year will buy a Mars Bar......?

    Pollies cop 'indexation' for their lifetime pay..... but then of course they'll be under the same roof and the same rules... (snuckles).. that'll bring 'em down to our level and maybe instill some sense into their ideas for a change...
    TREBOR
    23rd Jan 2019
    12:02pm
    Look around you - things could be worse!

    So I looked around... sure enough....
    Adrianus
    23rd Jan 2019
    4:59pm
    When super is not so super eh?
    TREBOR
    23rd Jan 2019
    6:25pm
    It was always flawed - but it's only recently that people are finding out and querying why their fees etc are so large and their account often so low - the rot started when governments started fiddling with it, whining all the time that the pension was going to be a huge cost on the budget in the future - when they still had 25 years of a lifespan for super to run its course....

    You simply cannot tell some people that their nose is on the front of their face...
    Adrianus
    25th Jan 2019
    8:52am
    Don't wish to give you a history lesson TREBOR, but will say that the change process has been going on for 50 years. We have finally broken free of the self regulating Mutuals and distributed the hidden cash in their No.1 statutory funds. They now do tax returns. By the way, we also need churches and unions to do tax returns.
    1984
    23rd Jan 2019
    1:12pm
    Look at the long term, some of us mightn't be able to look past next week lol.
    mike
    23rd Jan 2019
    1:23pm
    Well with Shorten's intention to stop franking credits to self funded retirees, which will further reduce self funded retirees income by up to 30%, many of whom have already lost their part pension and also many did NOT get the PCC reimbursed, things look even worse if labour gets in. One financial advisor is advising his clients to SELL all of their domestic shares that have franked dividends and buy international shares to to avoid Shortens run on the retirees income. Retirees selling of their domestic shares WILL FURTHER AFFECT THE SHARE MARKET
    TREBOR
    23rd Jan 2019
    1:27pm
    Keep after Bro Shorten on this.... I wouldn't sell the shares just yet if they are doing their job... better to have a long term sustained income than do a Howard/Costello and sell off the farm - neo-con dope thinking to the max there ... his master plan will have tweaks in it long before it hits the smaller SFRs on the head...

    Put Labor on notice that they are only a default government - not a government of choice for the many .....
    TREBOR
    23rd Jan 2019
    4:01pm
    Oh - as for master plans - how about a conspiracy theory that the current scare against small SFRs and shareholders is designed to cause them to sell and thus glut the 'big boys' - who will then own all the freebie cash-making capacity in the land...

    Send in The Reapers..... small shareholders are just a thorn in the side of BigBus... only there as tokens of 'free market enterprise' anyway, while BigBus holds the vast majority....
    OnlyGenuineRainey
    24th Jan 2019
    7:27am
    Trebor, the Alliance for Fair Retirement has just revealed that the estimate of 680,000 affected by the ALP proposed policy, and mostly SFRs, is wrong. There will actually be well over 1.1 million impacted and at more than 400,000 are APRA fund members. And they will have limited control to avoid loss, and most won't even know they will be affected until their first report after the legislation is passed. Even exempting small SFRs won't save them.

    The policy breaches public policy guidelines on four critical points and is defined officially now as EXTREMELY BAD AND DANGEROUS POLICY, that will do enormous harm. Modification is not good enough. IT HAS TO BE DEFEATED. There is absolutely no logic to is. It offers $0 economic benefit. It is patently unfair and totally contrary to ALP objectives in every way. There is a simple, fair and economically beneficial alternative that has been repeatedly put to both parties that would provide security for ALL retirees, a better environment to encourage working and saving and drive economic growth and give a huge boost to the budget. That is to change superannuation tax to 15% below the member's marginal tax rate, so the wealthy pay more and battlers get more help to build their retirement nest egg. Pay a universal OAP, slashing administration costs and delivering fairness and security to all - plus driving more growth through making work and saving worthwhile and facilitating more spending by retirees - and extend the super tax to ALL retiree income above a reasonable threshold.

    Why won't the ALP consider the better alternative? Same reason the LNP rejected it. It taxes the rich. Can't have that! Far better to milk stones and drive the middle and working class into poverty. And the poor suckers saying 'the franking credit policy won't hurt me 'cause I don't have shares' have no idea just how badly it will hurt them! The gullible will endorse Arsehole Short-on-Brains' policies and watch the nation destroyed. And the intelligent will vote for the extreme right-wing LNP and watch the society destroyed. And hopefully a lot will vote Independent or Minor and watch the government - whichever party holds majority - fumble about unable to do anything, and see the nation destroyed. God help us all! There ain't any solution except SACK ALL POLITICIANS AND WIPE OUT THE TWO PARTY SYSTEM FOREVER. How do we get a government with no politicians? That's the only hope we have, but I fear it's impossible!
    TREBOR
    24th Jan 2019
    8:07am
    Well said, Rainey - keep after them. They'll never understand until they cop it in the neck themselves.

    I will be voting Independent as I have for years now.

    Keating would have said a proposal for a universal pension and such would lead to an 'overheated' economy - but then he know nothing about economics anyway.

    All of the things you've cited above are why I've attempted to design the one-stop shop retirement packaging system for all.. to cut out rorting and special privileges, and to ensure some (gasps) equity in retirement. It seems it's not enough that the many take all the hits of economic downturns and filthy industrial relations and poor management all the way to the top and social engineering that has harmed so very many in so many ways and continues to do so - you don't see the likes of 'Goanna' Packer's wife running to the divorce courts for a quick run out - no way... you don't see those kinds arraigned for 'domestic violence' for disputing a credit card usage, do you? Insanity and only for the 'peasants'.

    ALL of this insanity is for the peasants ONLY - not for the 'better classes' - they are above that.

    Anyway - abolition of parties over a certain size might help, but my personal preference is for all Independents answering only to their electorate - hard work to negotiate anything, but better than the rubbish we now have, where either one of two stupid self-serving ideologies holds all the power and the ordinary people just have to swallow it.

    Stop The Votes!
    floss
    23rd Jan 2019
    1:27pm
    Yes Trebor a little mirth goes a long way when times get tough.The joke of the week must go to our super being put into the Future Fund,could you trust our pollies not to stuff it up or sell it .Lets just sell the whole country there must be a little left to sell or give away.
    TREBOR
    23rd Jan 2019
    1:32pm
    The AUSTRALIAN Future Fund MUST be kept out of the hands of politicians, past politicians, business mates, and anything remotely similar. A truly independent body is required for honest dealing, and costs of operation will not come from the capital invested, but from the earnings of the Fund.

    I once read a book about 'old money' in the US - what sticks in my mind was the simple statement that one of the secrets of 'old money' was NEVER to touch your capital but to live off its earnings......

    So - a real super fund will NOT leech off the capital of its members/investors, but will live off its means and its own performance. In a similar vein - I say again - if you are a smaller SFR, do NOT sell off your shares, but retain your capital and live off its earnings - do NOT 'downsize' to suit a climate of fear... I guarantee that by the time Bro Shorten's monster plan gets past the Senate (unlikely) it will mean that the smaller SFR will not lose one cent.
    TREBOR
    23rd Jan 2019
    1:36pm
    Not only that, but a sudden glut of shares on the market will mean they will fall into the hands of a growing shares oligarchy, who will snap them up cheap... OG has already indirectly warned you all about that, saying he'd snap them up. the end result of this will be a massively widening yawning gap between the 'rich' and the 'poor' - and it's all downhill from there.

    Do Not Sell Your Shares In A Fear Market! You have nothing to fear but fear itself.

    Told you all for ages he's a Labor stooge playing 'devil's advocate' by 'arguing' the neo-con version of reality, while secretly chortling every time he inspires the rabble to reject that same version of reality.
    TREBOR
    23rd Jan 2019
    8:41pm
    A bit serious there I was ... indeed - if the Guv'nah took on the role of Superannuation Superintendent, the swines would soon find a 'reason' to sell it off to their mates for 'greater efficiency'..... I can see the speech now:- "This government has the duty to ensure that it accesses the best advice and oversight of this precious commodity - the national superannuation scheme - and in order to do that, we must place it in the hands of competent private authority.. the public servants currently employed there will all transfer into private employment, and will thus be instantly more efficient!" ('EAR, 'EAR!).. oh.. and I'm buying shares there.. or my wife is... or my son/daughter....

    Look at Armenian Gladys (Captain Hooknose, following on from Blackbaird the Privateer) .. flogging off everything in sight in NSW.. if she keeps going, the Aborigines could possibly buy Captain Cook's statue and move it to Redfun.... do what they like with it.... why not sell Bankistan whole to the Muslims and let them set up a separate state... charge the keffir for traveling through on the trains, demand homage to Mohamed ..... Italians could buy Leich-a-hardta .... a government with any sense would auction off Ayers Rock and see if the local tribe can come up with the cash....

    Plenty of money to be made out there in Mad Glad's Emporium where everything is for sale.... but wait... she's got more! Buy using National Debt and you get not one.. but two sets of the new miracle rhetoric slicer complete with propaganda dispenser ... first 1000 buyers using National Debt will receive a lottery ticket in the draw for Mount Warning and Jervis Bay (proceeds to go to feed homeless and out of work politicians - when all their properties are tax dodge city investments, they have no home... take care of the homeless!).....
    OnlyGenuineRainey
    24th Jan 2019
    7:13am
    Trebor, the problem with 'don't sell your assets' is 'what the hell do you live on then?'. They generate bugger all income in a downturn. People with limited assets can't afford to hold a heap of cash for living, can't get a pension, and now Arsehold Short-on-brains wants to steal 30% of their return income (but ONLY if they are battlers with no other income - not if they manipulated to get a pension they don't need, or have a fat wage or salary or a nice business income stream, or property investments yielding taxable income... etc. etc. etc. Look after the rich, Mr S. Don't on any account make them pay their way. Just bleed stones. Force the poor battling buggers who saved to sell everything at rock bottom prices to pay their food bill, with a promise that when they have done that and they are next to broke, the government will give them a meagre handout and we'll have 'EQUALITY'). No reason for anyone to work or save unless they can be super-wealthy in retirement, so no tax revenue, massive welfare costs, but all the working and middle class equally poverty-stricken. Great plan! NOT.
    OnlyGenuineRainey
    24th Jan 2019
    7:37am
    And don't forget it's not just shares that will be affected. Managed Funds and unit trusts also distribute franking credits to unit holders. Many don't even know that and a lot of accountants have no idea how to claim them back so just ignore them and the client loses, but doesn't know they lose. The only SFRs who won't lose are those invested in property and foreign assets. The problem with foreign is that most don't pay dividends, so one has to be a trading wizard to earn any income. And of course investing in foreign shares denies Aussie companies the capital they need to grow.

    Shorten's BS policy will do far more harm than most people have even contemplated. It's hard to figure what he is really trying to do, but if he's trying to wreck the economy completely, he'll most likely succeed. Exempting small SFRs isn't going to solve anything. The policy is BAD in every way. It will do untold damage to the economy and the society. There are sensible ways to reign in the cost of dividend imputation, and sensible alternatives for boosting the budget responsibly and fairly.

    Everyone - ALP supporter or not - should be demanding Labor withdraw their seriously bad proposal immediately. Just can it. It has no redeeming features and no amount of tinkering will make it workable or beneficial in any way.
    TREBOR
    24th Jan 2019
    8:11am
    Unfortunately you can't dictate to the shares market how much it will pay, Rainey. It's a chance you take when you buy shares.. nothing says those shares will not collapse tomorrow.

    If shares are correctly dealt with as income, smaller income earners should not be affected - but I want Shorten to guarantee that...

    In retrospect it would have been far better to simply leave shares income up to the tax system - without the opportunity of the fattest in the land to hold shares in their 'superannuation fund' etc and thus reap benefit from lower tax rates... disgraceful.

    Tax handling needs a proper and massive overhaul in many ways to even begin to approach reason and fair and equal treatment for all. Same with company etc tax rules.
    OnlyGenuineRainey
    24th Jan 2019
    12:06pm
    Trebor, the current system DOES leave the taxing of dividend income up to the ATO, and it is absolutely fair, logical and appropriate. If you receive dividend income that was taxed before it was paid to you, you tell the ATO and it's credited against the tax you are liable to pay, but the dividend income is counted as taxable income. Quite proper. If your dividend income raises your taxable income to a level where you have not paid enough, you get a bill. If your dividend income was taxed unfairly because you don't earn taxable income, you get a refund. 100% logical, correct, and fair. But apparently beyond the capacity of the morons in the ALP to comprehend.

    That said, OTHER aspects of our tax system are totally stuffed up and need to be fixed.
    floss
    23rd Jan 2019
    1:30pm
    Mike don't forget Joe Hockey he really attacked Retirees.Shorten has yet to apply his stupid idea.
    TREBOR
    23rd Jan 2019
    1:37pm
    Fat Joe had to cut back on the retiree's age of entitlement, greedy bastards those baby boomers .... cut him some slack.... say..... about fifty pounds out of his back, or a few lazy mill out of his over fat bank account??

    Igor - sharpen the guillotines....
    TREBOR
    23rd Jan 2019
    2:14pm
    "Mrs Hockey - do you identify this as your husband's body?"

    "No... no - Joe was a good head taller....!"
    OnlyGenuineRainey
    24th Jan 2019
    7:06am
    Hockey attacked about 330,000 - a cruel blow, but specifically targeted at people with a given level of assets. Very wrong. Very cruel. Very unfair.

    Shorten is threatening to slash the income of more than 1.1 million - by a far higher percentage, and aimed at hurting those with less while protecting the wealthy. Over 400,000 of Shorten's targets are APRA fund members who have no idea they will be affected. Far more unfair in every way, and actually seriously breaches the nationally-accepted test of good public policy on FOUR points, but both Shorten and Bowen respond to requests for discussion of concerns with 'No Comment'.

    We have to hope that either the ALP won't win the election (then God help us, because Libs will - and we can't determine which is worse!) or that there will be enough Independents and Minor Party members to block this patently wrong and very harmful policy.

    I normally don't like a lot of Independents and Minors stopping the government from getting things done, but this time we need as many as possible to stop the excesses of the majors and hammer the message home that THE TWO PARTY SYSTEM IS NOT ACCEPTABLE TO AUSTRALIAS. We want it gone forever! It's destroying our society.
    Adrianus
    24th Jan 2019
    9:29am
    Don't worry, I'm sure he has more stupid ideas in store for us. He's on that bus with the 100 policies neatly tucked under the driver's seat.
    Kram
    23rd Jan 2019
    2:11pm
    One person shone a light on the compounding of fees related to investing. That was Jack Bogle who sadly passed away last week aged 89. Jack, who created Vanguard completely changed the finance industry and was the investors greatest friend. The worlds greatest investor Warren Buffett has suggested a statue of Jack should be erected in his honour.
    Adrianus
    23rd Jan 2019
    4:57pm
    Not timing, but "time in."
    ardnher
    24th Jan 2019
    3:05pm
    I know of a man and his wife who spend up to 5 hrs every week day overseeing their SMSF. Gawd what a way to spend your retirement. Not for this little duck!
    MacI
    24th Jan 2019
    6:58pm
    I'm with you Ardnher. All the moaning worrying will send them to an early grave.
    Adrianus
    25th Jan 2019
    8:41am
    25hrs a week?? I hope they get well paid for their efforts.
    MacI
    24th Jan 2019
    6:05pm
    I don't get the moaning about Super funds. Super is merely a low tax vehicle for saving and investing for retirement and providing a no-tax (at present) income in retirement. If you don't like the volatility of the share market then most Super funds offer low volatility options, even cash. Members of most Super funds are offered a range of options to choose from with good guidance as to the likely volatility, the minimum investment horizon, and past performance. Of course if you don't trust them to do better than yourself there is the option of a SMSF or even investing outside of Super.
    SFR
    25th Jan 2019
    3:08pm
    Exactly Macl, the financial market usually has a correction one year in seven. My Super has had 4 negative months in a row but over the last 7 years is up over 75%.
    Diversification is one way to soften the effects.
    this is part of the normal market movements.
    Justsane
    27th Jan 2019
    4:48pm
    It has always seemed to me that Superannuation has a built-in disadvantage as a money pot for retirement. Because, quite apart from 'fees & charges' (read 'insurance') gouging big holes out of it, the money has to be invested for years, nay, decades, and is subject to all the ups and downs of the economy during that time.

    An alternative would be to acknowledge that it is the present generation of workers who are paying for the pensions of the now retirees. This does not entail the continuous investment, as money collected & money paid is at the same time. But this concept is unpalatable to some workers, who cannot see that one day it will be their turn to receive from future workers.

    Another alternative would be to go back to collecting a levy on a person's wage or salary specifically to go into a fund to pay retirement incomes. This has the advantage that the worker is seen as paying for his own retirement, and is not relying on future taxpayers, although this would be partly illusion, as money in and money paid out would also be at the same time. But at least, the fact of having contributed to a retirement fund would give someone entitlement to their pension.

    The trouble with entitlement, though, is that of means testing. I am not against means testing the pension. It seems to me a waste of money if very wealthy people can get it - (in Britain, Prince Charles was entitled to a pension, which, I believe, he donated to the people).

    But I think that the means testing should be fair, equitable, reasonable and fairly generous. The narrowing of the taper rate in 2017 was not reasonable or generous, though it could be seen as fair and equitable. It was not reasonable because the difference in assets allowable between claiming a full pension and losing the pension altogether as a lump sum would earn less than the pension, if invested at present rates.

    Does the fact that the pension is means tested preclude it being an entitlement? You are entitled to it if you meet age, residency/(work), income and asset requirements, so why should these last two stop it from being an entitlement? Referring to it as welfare is demeaning - especially after a lifetime of hard work.

    So who gets the most benefit out of Superannuation? The Government, by having to pay out less for pensions? The finance & insurance companies who always seem to have their fingers in the pie? The retiree, who would probably prefer to live on the pension alone if it were more generous? I am no expert on Superannuation, but it seems to me to be a whole lot of stuffing around - for what?


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