A lot is said about the inequality between high income earners who make deductible contributions to Super and enjoy an immediate tax arbitrage of up to 31.5%, and low income earners who’s SGC is effectively taxed at their marginal rates (or higher).  In fact it is again a major political question and a budget focus as the government tries to achieve a surplus by cutting the tax concessions available. 

The Government has presented its budget for 2012, announcing as expected a small surplus of $1.5 billion.  Commentators are mixed on whether they think this is a good thing, with most it seems questioning, not the aim of being in surplus, but the timing and methods of its achievement. 

In early March, Graeme Miller, head of investment at Towers Watson in Australia, was reported in I&T News as saying Private equity is an illiquid investment and is not suited to the superannuation business model. 

Give me a break! The Australian today has a number of articles about a proposal to restrict default superannuation funds to those that perform well. Rather than trying to put systems in place the deny the need for personal responsibility in managing and caring for your Super (measures that will only benefit protection of the status quo) how about getting people more actively involved.  

Income investments, often called 'fixed interest' although the income may in fact float rather than being fixed, will generally be purchased for the income they provide rather than for any realistic prospect for growth. Even hybrids, which can be linked to share prices to varying degrees, are often purchased with a view to holding the security to maturity. Yes the price will change on a daily basis because they are listed on the ASX, but from an investment perspective you have bought an income stream for a period of time, and then expect to get your money (or equivalent) back.  

Give me a break!  The Australian today has a number of articles about a proposal to restrict default superannuation funds to those that perform well. Rather than trying to put systems in place the deny the need for personal responsibility in managing and caring for your Super (measures that will only benefit protection of the status quo) how about getting people more actively involved. 

When an SMSF is running a pension, the assets backing that pension enjoy an exemption from tax on earnings.  However, in order to enjoy this benefit, at least the minimum pension amount must be paid, either before a full commutation (roll back) of the pension if this happens during the year, or otherwise by the end of the year.  If the minimum pension fails to be taken, the ATO’s view is the pension fails to exist for the whole of the financial year. This means that the fund would be taxable on the whole years income. 

I know I have written about annuities before, and the push that is currently afoot to convince SMSF trustees that they should commit at least some of their funds to these types of products.  They are being touted as an answer to the longevity risk that many retirees face (the risk that you will outlive your money). Unfortunately, this argument is typical of a fund’s management industry in search of a guaranteed income (for themselves) and perhaps for you also. 

A very common SMSF structure is where a husband and wife start their own fund and run their own affairs, whether this is in accumulation or pension phase.  They are the sole members and trustees. But what happens if one of them dies? 

When there is a change of trustee, whether it is from individuals to a corporate, or a new individual trustee, there are a few things you will need to do.