Issue: 451
Sent: 23-08-2011 13:59:02
In this issue:

If Not the End of the World, an Opportunity!A How To Book Of Self Managed Super FundsThe Pension MessEmail Marketing For Planners
Return to full article list
HomeFree weekly newsletterSelf Managed Super Fund ArticlesContact usLogin

The Pension Mess

Click here to buy - A How To Book of SMSF's by Tony Negline
Tony Negline

The Tax Office's draft ruling on pensions continues to dominate much of the technical commentary.

There are many flow on effects of the ruling especially the Centrelink implications of nominating a reversionary beneficiary and the changes it will make to the incomes test and the use of a longer life expectancy.

Only time will tell if this ruling survives in its current format with the start date being July 2007. How will large funds be able to go back and examine every death benefit that has been paid or even the tax implications of every full commutation?

At some point the Government will be forced to make a decision - either they elect to amend the law or the ATO agrees that it's ruling should commence at a later date.

In reality it's all quite a big mess and one that will be causing many retirees additional concern than they are already feeling because of recent market volatility.

In my view the funds management industry needs to move away from unitised funds for income stream products. The constant valuation of assets to prevailing market conditions and the total return nature of these products is simply not suitable for retirement income stream products. It would seem that my view is not widely shared within the financial services profession and product providers.

I think the Government also needs to allow the minimum income to be based on the moving average of the market value of assets over several previous years (say three to five years). This will help to smooth the income coming out of these products.

Retirees also need to be able to put money aside for later in life and not have it assessed for Centrelink purposes. This money could be left in the accumulation phase of super funds. The Government will then be picking up some income tax from the earnings of this money. Perhaps you could only access this money if your main investments disappear (through market movements or fraud etc) or if you reach your then life expectancy plus three years when you were 65.

I am not convinced the answer is deferred annuities which seems to be pushed by some actuaries.

Transparency is a key issue.

Finally please consider purchasing a copy of this book "A How To Book Of Self Managed Super Funds". You can look at the contents page at the following link:

For details of the changes made from version 4 to version 5 visit:

As you'll see from the list there have been many changes.

Two purchase options are available - once only subscription - $55 inc GST - or an annual subscription will gives you access to all the updates made throughout the year ($120 inc GST). The book can be purchased at the following link:

Share this article
Click to share this article on Facebook Click to share this article on Twitter

Previous article         Next article

If you liked this article and would like more by email, subscribe! It's free.

[Bold fields are required]

Your details

Your alternate email address is used only if messages to your primary email address are returned to us.


Do you work in the financial services industry?

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.

Site design by Raycon