Sent: 04-12-2012 09:26:04
In this issue:
Return to full article list
HomeFree weekly newsletterSelf Managed Super Fund ArticlesContact usLogin
Centre for Independent Studies policy release about the Super Guarantee
Over the weekend the Centre for Independent Studies released a Policy Monograph about the Super Guarantee.
In my view the document doesn't say too much that isn't already known about what's wrong with the SG system. Overall its author, Dr Stephen Kirchner, is negative about the SG system and suggests a selection of potential improvements.
It's reasonable to assume that many financial services people will disagree with his views especially where he questions the suitability of compulsory super as a policy and the overall efficiency of the super 'marketplace'.
Given the current Government has legislated recent increases in the SG it's unlikely to undo what they'll argue is good work. As the Coalition have also signed up to the same policy it's also unlikely they'll undo these increases.
In other words the current system isn't going to change to any significant extent. This isn't necessarily a good outcome.
Dr Kirchner suggests that super should only be taxed when benefits are taken and that benefits should have to be taken as annuities. I have no problem with the idea that super monies should be used to provide income in retirement. I'm not convinced the compulsory use of life office statutory funds or defined benefit reserving strategies is the most efficient and overall best approach.
He also argues that the aged pension should be harder to get. Good luck with the political implementation of this policy. He thinks that super benefits should only become available at the age pension age - but interestingly he makes no recommendation that this age needs to be increased beyond the current maximum of 67.
If the current age pension policy reflected similar thinking to that put in place by the politicians in charge in 1910, the aged pension wouldn't be available until about age 85. I can't see too many people agreeing to such a change even if it would significantly reduce the Government's social security bill.
The Essential SMSF Guide
My book which I first self-published in 2009 is now published by Thomson Reuters as The Essential SMSF Guide. Thomson Reuters are responsible for distributing the book (which is now up to date to 30 June 2012). The book has been endorsed by the Institute of Chartered Accountants. Further details are available here:
This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.