Below is an ABC news story from last week. Please have a read of this before reading further.
Key fund's woes puts super at risk for thousandsOn Wednesday 14 December 2011, 9:52 EST,
A key scheme of one of Australia's biggest superannuation funds is short of money, leaving more than 100,000 people facing the prospect of having their super slashed.
At universities across Australia just about everyone from the boffins to the backroom staff is in a super scheme called UniSuper.
The fund has more than 450,000 members and about $30 billion in assets under management.
Its members thought they were in a scheme that was secure but that is no longer the case.
Could the failure of Uni Super really happen? Yes and it already has happened to other super funds!
Who pays for the failure of a Super Fund? You!
Following the collapse of Trio Capital, the Federal Government announced in April 2011 that it would provide a grant of approximately $55 million in financial assistance to benefit the members of four super funds that were formerly under the trusteeship of Trio Capital.
This grant of financial assistance has now been recovered by way of a levy on all regulated superannuation funds under the Superannuation (Financial Assistance Funding) Levy Act 1993. The levy is based on the total assets of each fund at 30 June 2010 multiplied by a rate of 0.0001347, with a maximum of $750,000 per superannuation trust.
Commencing 21 November 2011, this levy will be passed onto members. This will result in all members with an open super or pension account being charged a proportionate fee based on their account balance at 30 June 2011. The deduction will appear in members' accounts with the description 'Financial Assistance Levy'.
When you receive your next statement from your Super Fund take a look, I bet you have a Financial Assistance Levy being charged to your account. As such you will pay for the failure of another person’s super fund.
Anyone with a Self Managed Super Fund does not pay the Financial Assistance Levy.
With a new year approaching every house hold should sit down a quickly do the math on what they are worth and where they need to be in retirement. Just jot down the following figures;
- Value of your house less what you owe to the bank.
- Value of your combined super.
- Value of any other investments or investment properties less what you owe to the banks.
- Value of any other assets being cars, home contents etc.
It has been my experience that your Superannuation is you largest asset, if not your second largest asset if you have paid off your house.
My concern is that very few people give their Superannuation the respect it deserves. Most people are very house proud but find Superannuation annoying and frustrating.
This New Year do yourself a favour;
- Pay a professional to explain your superannuation to you. We can help.
- Take control of you Superannuation.
From reading the above article by the ABC it has become more obvious that you need to be in control of your Superannuation.
You have a number of options in doing this, a Self Managed Super Fund or a product like the new Asgard Infinity which is cheaper then Industry Funds and you are in control.
Let us know if we can help.
For more information please call us on 4771 4577.