RETIREMENT INCOME – AUSTRALIA

700,000 retirees overpaying on super fund tax, says SMC

roymorgansocial Leave a comment

Original article by Glenda Korporaal
The Australian – Page: 19 : 29-Jan-25

New research from the Super Members Council suggests that many Australian retirees are needlessly paying tax by leaving their superannuation in accumulation mode. These earnings are taxed at 15 per cent; in contrast, earnings from super funds in the retirement phase are not taxed, provided the fund’s balance is less than $1.9m. The research has found that about 700,000 people over the age of 65 who are no longer working full-time still have money in accumulation accounts, which is estimated to cost them an average of about $650 a year.

CORPORATES
SUPER MEMBERS COUNCIL OF AUSTRALIA LIMITED

The $5.1 billion problem costing one in four workers

roymorgansocial Leave a comment

Original article by Millie Muroi
The Age – Page: Online : 28-Aug-24

The Super Members Council estimates that about 2.8 million workers were not paid their full superannuation entitlement in 2021-22, which equates to one in four workers. The underpayment totalled $5.1bn, which is around $1,800 per worker. The council says this could reduce affected employees’ retirement payouts by around $30,000; it also notes that unpaid super could force many people to delay their retirement. The council contends the federal government’s legislation requiring employers to align super contributions with their pay period rather than each quarter will help reduce underpayments; however, Labor has yet to legislate the change.

CORPORATES
SUPER MEMBERS COUNCIL

What it now costs to retire comfortably

roymorgansocial Leave a comment

Original article by Anthony Keane
The Australian – Page: 19 : 13-Mar-24

Data from the Association of Superannuation Funds of Australia shows that couples now require $72,148 a year to live comfortably in retirement, while single people need $51,278. The cost of a comfortable retirement increased by 3.5 per cent in 2023, below the official inflation rate of 4.1 per cent. The rising cost of insurance, electricity and food contributed to the increase in ASFA’s retirement standard for the December quarter. CEO Mary Delahunty says the compulsory super guarantee’s increase to 12 per cent by mid-2025 will help more people to reach ASFA’s comfortable retirement standard level.

CORPORATES
THE ASSOCIATION OF SUPERANNUATION FUNDS OF AUSTRALIA LIMITED

Ex-RBA governor questions super aims

roymorgansocial Leave a comment

Original article by David Ross
The Australian – Page: 4 : 22-Feb-23

Former Reserve Bank of Australia governor Bernie Fraser says the federal government’s legislated objective for superannuation should include allowing people to use part of their accumulated savings to buy a home. The government’s draft purpose statement for super says amongst other things that it should "preserve savings to deliver income for a dignified retirement". Fraser contends that there is no more comforting thought for Australians than knowing that they will have somewhere to live when they retire. He has also questioned the government’s proposal to allow super funds to invest in social projects, noting that they tend to have low returns.

CORPORATES

Super withdrawals hit $32bn as rush slows

roymorgansocial Leave a comment

Original article by Lachlan Moffet Gray
The Australian – Page: 15 : 8-Sep-20

Data from the Australian Prudential Regulatory Authority shows that $32.6bn has now been withdrawn from superannuation funds via the federal government’s early access scheme. However, there is evidence to suggest that the rate of withdrawals is slowing, with just $380m paid out to fund members in the week to 30 August. This is the lowest weekly total since the scheme began. Meanwhile, Brendan Coates of the Grattan Institute says the scheme’s impact on retirement income has been overstated, although ACTU president Michele O’Neil disagrees with this view.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, GRATTAN INSTITUTE, ACTU

Big super warns of cash-in risk

roymorgansocial Leave a comment

Original article by Joanna Mather, Tony Boyd, Aleks Vickovich
The Australian Financial Review – Page: 1 & 8 : 3-Apr-20

Treasury has forecast that about $27bn in total will be withdrawn from superannuation funds after the federal government relaxed the rules governing early access for people who have been impacted by the pandemic. AustralianSuper CEO Ian Silk notes that industry estimates suggest that withdrawals could top $50bn. He adds that some super funds may struggle to cope with a big increase in withdrawals, but stresses that it will not be an issue for AustralianSuper. Silk also warns that a surge in withdrawals will affect the super industry’s capacity to invest in and recapitalise businesses when the crisis abates.

CORPORATES
AUSTRALIANSUPER PTY LTD

Lift super to 12pc to defuse age time bomb

roymorgansocial Leave a comment

Original article by Richard Gluyas
The Australian – Page: 21 : 22-Nov-19

AustralianSuper CEO Ian Silk appeared before federal parliament’s economics committee on 21 November, where he emphasised the need to increase the superannuation guarantee from 9.5 per cent to 12 per cent. He warned that the legislated increase is necessary to avert the ‘economic time bomb’ of the nation’s ageing population, arguing that the pension system alone is not sufficient to provide Australians with a comfortable retirement. Silk also expressed support for consolidation in the super sector, and the exit of funds that consistently underperform.

CORPORATES
AUSTRALIANSUPER PTY LTD, AUSTRALIA. HOUSE OF REPRESENTATIVES STANDING COMMITTEE ON ECONOMICS, INDUSTRY SUPER AUSTRALIA PTY LTD, LIBERAL PARTY OF AUSTRALIA

There’s no point in homing in on pension asset test

roymorgansocial Leave a comment

Original article by Judith Sloan
The Australian – Page: 12 : 19-Nov-19

No government for the foreseeable future is going to contemplate including a family home in the age pension assets test. For one thing, only about seven per cent of the nation’s two million age pensioners would be affected if homes valued at more than $1.5m were to be subject to the assets test. This would mainly affected pensioners in Sydney and Melbourne. Meanwhile, home equity release products are worth considering in relation to retirement incomes policy, although existing products of this nature are undesirable, including the federal government’s own Pension Loan Scheme.

CORPORATES

Business splits on 12pc super

roymorgansocial Leave a comment

Original article by Joanna Mather
The Australian Financial Review – Page: 1 & 6 : 23-Oct-19

The Australian Chamber of Commerce & Industry’s chief economist Ross Lambie says any further increase in the superannuation guarantee should be dependent on an increase in productivity. Australian Industry Group CEO Innes Willox supports the long-term goal of lifting the super guarantee to 12 per cent; however, he is open to further delaying the rise, citing factors such as the cost to businesses and the need for real wages to increase. AustralianSuper CEO Ian Silk argues that the increase in the super guarantee has been legislated, and it has already been delayed twice.

CORPORATES
AUSTRALIAN CHAMBER OF COMMERCE AND INDUSTRY, THE AUSTRALIAN INDUSTRY GROUP, AUSTRALIANSUPER PTY LTD, AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIAN LABOR PARTY, ACTU, MASTER BUILDERS AUSTRALIA INCORPORATED, CONSTRUCTION AND BUILDING UNIONS’ SUPERANNUATION FUND, AUSTRALIAN HOTELS ASSOCIATION, HOST-PLUS, AUSTRALIAN MINES AND METALS ASSOCIATION (INCORPORATED), GRATTAN INSTITUTE, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN RETAILERS ASSOCIATION, MASTER ELECTRICIANS AUSTRALIA PTY LTD

Savers come out second best as banks quietly slash interest rates on deposits

roymorgansocial Leave a comment

Original article by Michael Roddan
The Australian – Page: 17 & 27 : 11-Oct-19

Lenders have cut interest rates on term deposits by between one and and 35 basis points since the Reserve Bank cut the official cash rate by 25 basis points on 1 October, according to data from ­RateCity. National Seniors Australia’s chief advocate Ian Henschke notes that a third of its members have their money in term deposits, with interest rates on term deposits now at their lowest since the 1950s. He claims that the federal government is "profiteering off the backs of pensioners", by not reducing the deeming rate.

CORPORATES
RESERVE BANK OF AUSTRALIA, RATECITY PTY LTD, NATIONAL SENIORS AUSTRALIA LIMITED, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, BENDIGO AND ADELAIDE BANK LIMITED – ASX BEN