...AYB240 Superannuation Regulation and Practice Semester 1, 2014 Research Project Due 5pm Monday 28 April, 2014 Name: Sheshna Chand Student Number: N8402647 Word Count: 1250 Mukesh27/30 Introduction The focus of this report is to compare different superannuation funds and recommend the best option for Emily. In this report the following six super funds will be compared including: * Australian Super * Australian Ethical Retail * Club Plus * Commonwealth Essential Super * HOSTPLUS * Sunsuper Also an analysis of the MySuper and other investment options available within that fund will be compared for her to invest in. 2.0 Choosing a Super fund Choosing a super fund is an important decision to make and need to be researched properly as it will impact on your retirement income. Before choosing a superannuation fund, Emily should consider the following factors: 2.1 Investment Performance “Super is a long-term investment, so it’s important to look for a fund with the discipline and consistency to generate strong returns over the longer term” (Commonwealth, 2014). A comparison of the investment performance for the six super funds over the period of ten years was done to gain a true insight into its probable performance. Figure 1: Investment Return (%) Source: Chant West, Super AppleCheck, (March 2014) As demonstrated in graph above, the three best performing super funds are Australian Super, HOSTPLUS and Sunsuper with a growth...
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...y2. The Superannuation System in Australia Superannuation has been used in Australia as a policy instrument to increase retirement incomes and reduce reliance on the age pension (which is provided by the government). Tax concessions have existed for superannuation since 1914.1 Until the 1980s, interest and capital gains on superannuation funds were not taxed. However, the extent of tax concessions has since been reduced. In 1986 compulsory superannuation was introduced in Australia. The system initially applied to employees on Federal awards, with 3 per cent of their earnings saved in superannuation funds in lieu of wage rises.2 The system was extended to apply to most employees in 1992 under the Superannuation Guarantee Charge (SGC), with the contribution rate gradually raised to its current level of 9 per cent of earnings and coverage increased to 90 per cent of employees. Perhaps not surprisingly, households’ superannuation assets as a proportion of GDP almost quadrupled in Australia over the last 20 years (Figure 1), and are now the second largest component of household wealth after non-financial assets, which comprise mostly housing.3 However, the growth in superannuation funds (or their equivalent) was an experience shared by the US and the UK, which do not have compulsory superannuation schemes in place. Valuation effects were an important factor behind the unprecedented growth in superannuation assets over the 1980s and 1990s, explaining around 70 per cent of the rise...
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...NAME: LIN XIAOYI DATE: 21/03/2012 C3120705 Week 4: There has been a significant growth in the amount of money invested in Australian superannuation funds over the past twenty years. a) Critically analyse the source of this growth b) Discuss the regulatory environment within which superannuation funds operate. Answer: a) The growth is primarily caused by the introduction of Superannuation Guarantee Charge, introduced from 1 July 1991, which initially required employers to contribute at least 4% (or 3%for smaller employers) of most employees’ wages or salary to a superannuation plan. In 2002, the government has also legislated that this minimum contribution rate increased to 9% for all employee. In addition, these required contributions vest with the employee and cannot be accessed until age 55.In other words, the objective is that the funds remain within the superannuation system until the person’s retirement. In view of the increasing importance of superannuation funds within both the economy and the capital markets, it is necessary that the investment policies of these funds and their implication are better understood by the government, policy makers, commentators, market players and companies seeking capital. b) Financial Services Working Group One of the ways the Government is doing this is through the Financial Services Working Group. The Working Group was established to facilitate the creation of short, simple and readable disclosure documents...
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...RATES AND TABLES Marginal Tax Rates1 (MTR) |Taxable income (TI) |Tax on this TI (2012/13) | |$0 - $18,200 |Nil | |$18,201 - $37,000 |19 cents for each $1 over $18,200 | |$37,001 - $80,000 |$3,572 plus 32.5 cents for each $1 over $37,000 | |$80,001 - $180,000 |$17,547 plus 37 cents for each $1 over $80,000 | |$180,001 and over |$54,547 plus 45 cents for each $1 over $180,000 | 1. Australian residents, whole year. Low Income Tax Offset (LITO) |Taxable income (TI) |Reduction in offset (RI) |Maximum offset | |$0 - $37,000 |Nil |$445 | |$37,001 - $66,666 |(TI - $37,000) x 0.015 |$445 - RI | |$66,667 and above |$445 |Nil ...
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...dividends and his rent from the rental of his family home. The complicated facts are that LW signed a 3-month contract on the 1st July and then went on to sign a 3-year contract on the 5th of October 2009. In May 2012, LW returned to Australia due to family illness. Rules A person is a resident if he/she resides in Australia under Section 6(1)(a) of ITAA1936 and includes a person i) Whose domicile is in Australia, unless the Commissioner is satisfied that the person’s permanent place of abode is outside Australia. ii) Who has actually been in Australia, continuously or intermittently, during more than one half of the year of income. iii) Who is: a) A member of the superannuation scheme established by deed under the superannuation act 1990; or b) An eligible employee for the purposes of the Superannuation Act 1976; or c) The spouse, or a child under 16, of a person covered by sub-subparagraph (A) or (B) Section 6(1)(a) of the ITTA1936 defines a resident of Australia as a person other than a company who resides in Australia. Under common law, this test is referred to as the ordinary concepts test. In the cases of Levine v IRC (1928) and IRC v Lysate (1928), it was held that a broad range of factors will be considered in determining ordinary residence such as the maintenance of a place of abode in...
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...your superannuation to be paid into MTAA Super please provide this completed and signed form to your employer. It will contain all the information your employer needs to administer your choice, and you can use it instead of the ‘Standard choice’ form given to you by your employer. If you use capital letters. Please want your superannuation to be paid into MTAA Super please provide this completed and signed form to your employer. It will contain all the information your employer needs to administer your choice, and you can use it instead of the ‘Standard choice’ form given to you by your I request that all my future superannuation guarantee contributions be made to the MTAA Superannuation Fund. employer. Please use capital letters. I request that all my future superannuation guarantee contributions be made to the MTAA Superannuation Fund. Employee name Employee number (if applicable) Employee name Date Employee number (if known) Tax file number (TFN) Date Turn off layer before exporting / / / / Other PDSs that have this form Under the Superannuation Industry (Supervision) Act 1993, you are not obliged to disclose your tax file number, but there may be consequences, such as paying increased tax. See the document How Super is Taxed at www.mtaasuper.com.au/memberPDS/howsuperistaxed. If your TFN is Signature provided, your employer must provide your TFN to the super fund. Return this form to your employer. Do not send this to the Tax Office or to your superannuation fund...
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...How have social policies and changes to the Australian welfare state affected the aged population. In 1901 just 4.0% of the Australian population were older people and after two decades this has increased to 6.4%. In 2011 the aged population continued to increase and reached 14%. The Australian Bureau of Statistics (Abs.gov.au, 2012) indicates that since the baby boomers are now becoming old, there has been a decrease in fertility rates and an increase in life expectancy. The population of people over 65 years has continued to increase and it is predicted that it will continue to increase for the next 50 years. As people become older they are more susceptible to becoming sick and in need of government benefits. Since there is a major growth in the percentage of older people there have been major concerns that this will place more stress on our economic, social and health resources. (Jamrozik, 2009) explains that a social policy is intended to increase the standard of living and provide access to services through the means of sharing society’s resources. A wide range of social policies have been introduced in the last 20 years to support our aging population. Our Government provides income support and various concessions for those eligible (Humanservices.gov.au, 2014). As people retire they are no longer able to earn income and are in need of this income security in order to survive. A person to be eligible for this type of support depends on their income, assets and age...
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...REST Super Product Disclosure Statement and forms Effective 1 October 2015 REST Super has a MySuper option Issued by Retail Employees Superannuation Pty Limited (Trustee) ABN 39 001 987 739 AFSL 240003 Retail Employees Superannuation Trust ABN 62 653 671 394 Unique Superannuation Identifier RES0103AU rest.com.au 1300 300 778 Contents 1. About REST Super 3 2. How super works 4 3. Benefits of investing with REST Super 5 4. Risks of super 6 5. How we invest your money 7 6. Fees and costs 9 7. How super is taxed 12 8. Insurance in your super 13 9. How to open an account 16 This PDS provides a summary of significant information and it includes links to important information which forms part of this PDS. The ‘REST Super Member Guide’, ‘REST Super Insurance Guide’, and ‘Investment Guide’ are important information you should consider before making a decision to invest in this product. The information in this document is general information only and doesn’t take into account your personal financial situation or needs. You should consult a licensed financial adviser to obtain financial advice that is tailored to suit your personal circumstances. The information contained in this PDS is up to date at the time of preparation. However, the Trustee reserves the right to change the insurer* and vary the benefits, insurance costs, procedures or terms and conditions from time to time. Some...
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...strategies? Wrong Score : 0 / 1 Your choice | Expected choice | Answer | Comment | | | The adviser undertakes the fact finding process in order to establish the client’s goals and objectives | | | | The adviser brings the client up-to-date with the implementation of the recommendations | | | | The adviser states the establishment and ongoing management costs associated with the implementation of the strategy | | | | The adviser goes through the Risk Profile Questionnaire with the client | | 3. When is a strategy of paying insurance premiums through superannuation arrangements most beneficial? Wrong Score : 0 / 1 Your choice | Expected choice | Answer | Comment | | | The client is able to reduce overall net cost (or increase the amount of cover for the same cost) of their life and TPD insurance by structuring ownership through superannuation | | | | The superannuation fund is able to reduce its tax liabilities by claiming deductions for insurance premiums on life, TPD, income continuation and trauma insurance | | | | The clients wish to reduce the burden of paying insurance premiums for income continuation and trauma insurance out of their after-tax incomes |...
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...The Australian Financial System in the 2000s: Dodging the Bullet Kevin Davis* Abstract The global financial crisis (GFC) occupied only a quarter of the decade of the 2000s but, because of its severity and implications for future financial sector development, dominates the decade. The Australian financial system coped relatively well with the GFC, raising the question of whether there was something special about its structure and prior evolution which explains that experience. This paper reviews Australian financial sector performance and development over the decade, then provides a more detailed overview of the Australian GFC experience and its implications, and considers explanations for the Australian financial sector resilience. 1. Introduction The Australian (and global) financial system entered the first decade of the millennium preparing for a systems crisis, in the form of the Y2K computer scare, which on 1 January 2000 passed without event. But towards the end of the decade, the financial sector was faced with, arguably, its most serious systemic crisis ever, which the Australian financial system and economy weathered relatively well compared with advanced nations in the northern hemisphere.1 While the GFC occupied only one-quarter of the past decade (from mid 2007), it prompts the questions which this review must seek to answer. Was there something about the structure and evolution of the Australian financial system which explained its resilience in the face...
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...Finance Maximising Wealth Question 1 Superannuation refers to specific savings accumulated by individuals and plays a crucial role in the sustainability of life upon retirement. (Viney & Phillips, 2014) Australia introduced a compulsory superannuation scheme in 1992 which has seen the rise of super funds and sustainable living in our growing population. Superannuation is vital in the financial system as it enables individuals to support themselves throughout retirement, instead of putting strain on government funding. Based on my individual circumstances and investment risk profile I have chosen the Balanced fund with 6.5% interest. Upon calculations of my retirement on the Capital Stable fund, I would not have enough money to sustain a couple even in a modest lifestyle. Although there is more risk involved in choosing Balanced over Capital Stable, it provides a greater return upon retirement. Question 2 Balance in my superannuation fund at 1st January, 2050 Future Value of an Ordinary Annuity Using the Future Value of an Ordinary Annuity formula has given me the amount of $1,240,346.90 which will be in my superfund upon my retirement. Question 3 Based on the total amount of Superannuation I will have in 2055 when I turn 75, I expect to lead a lifestyle between modest and comfortable as I will spend $48,000 of my available $49,613.88 per annum superannuation so I have the ability to invest in shares. Present Value of Ordinary Annuity This...
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...providing protection for families and assets, and financing property and infrastructure projects. By delivering the right balance of security and performance, AMP helps its customers and clients own their tomorrows through: * financial planning and advice * superannuation, retirement income and other investment products for individuals * superannuation services for business and employer-sponsored schemes * income protection, disability, general and life insurance * selected banking products * investment including shares fixed interest, property and infrastructure About AMP AMP has been helping Australians take control of their financial futures and own their tomorrows for over 160 years. Founded in 1849, AMP has played a substantial role in shaping modern Australia and New Zealand by helping millions of customers build financial security, providing protection for families and assets, and financing property and infrastructure projects. By delivering the right balance of security and performance, AMP helps its customers and clients own their tomorrows through: * financial planning and advice * superannuation, retirement income and other investment products for individuals * superannuation services for business and employer-sponsored schemes * income protection, disability, general and life insurance * selected banking products * investment including shares fixed interest, property and infrastructure About AMP AMP has been helping...
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...Date The Trustee(s) XXX Superannuation Fund Street Suburb, State, PCode Dear Trustee(s), AUDIT ENGAGEMENT – YEAR ENDED 30th June 2007 Thank you for my appointment as auditor of your Superannuation Fund. As it is necessary to clarify my role to you, under the Superannuation Industry (Supervision) Act 1993 (the SIS Act) and Regulations, I wish to set out the detail of my terms of engagement as follows: 1. Audit of Financial Report In accordance, with section 113 of the Superannuation Industry (Supervision) Act 1993 (SISA), the financial report of a regulated superannuation fund must be audited by an approved auditor. The auditor must give the trustees an audit report on the financial report in the approved form within the prescribed time after the year of income to which the financial report relates. I direct your attention to the fact that the trustees are responsible for the maintenance of adequate accounting records and internal controls, the safeguarding of superannuation fund assets, the selection of accounting policies and the preparation of financial reports and returns. The trustees are required to keep minutes of meetings, reports and records of trustee changes for a period of at least 10 years. My audit will be conducted in accordance with Australian Auditing Standards. Those auditing standards require that I comply with relevant ethical requirements relating to auditing engagements and that I plan and perform the audit to obtain reasonable assurance...
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...Table of contents 1. Executive Summary .................................................................................................. 3 2. Service Policy and Disclaimers ................................................................................ 4 3. Family Profile ................................................................................................................. 6 4. Goals and Objectives .................................................................................................... 8 4.1. Short-‐term Goals ................................................................................................................ 9 4.2. Mid-‐term Goals .................................................................................................................... 9 4.3. Long-‐term Goals .................................................................................................................. 9 5. Risk Profile ................................................................................................................... 10 5.1. Risk Profile Conclusion .................................................................................................. 12 5.2. Risk Recommendation ......................................................
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...Question 1 Discuss the factors that resulted in the Asian financial crisis and critically analyse the changes that came about as a result of this crisis. The factors are: • Sustaining a fixed exchange rate when it was no longer suitable, • Allowing too many short-term capital flows to accumulate with a high degree of currency speculation, • Lacking a sufficient risk management system at the national level as well as regional level. Changes that came about as a result of the crisis was that the governments of South Korea and Thailand each have sought to generate economic recovery by expanding domestic credit. The rapid credit expansion in both countries has created concerns about the extent to which their economies can channel these funds efficiently and sustain economic growth. Further more the International Monetary Fund (IMF) stepped in to initiate a $40 billion program to stabilize the currencies of South Korea, Thailand, and Indonesia, economies particularly hard hit by the crisis. Question 2 Off-balance sheet business has grown to become a significant component of banking operations. i) Explain what is meant by off-balance sheet business, including an examination of the four main categories of off-balance sheet business. An off-balance sheet is a way of keeping track of an asset or debt without including it in the main accounting systems. Most companies have two methods of managing assets and debts, known as on- and off-balance...
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