Category: Superannuation

Property firm hit for false super claims

The director of Consumer Affairs Victoria has accepted an enforceable undertaking from a property investment company that made false claims related to investing in a superannuation fund.

Earlier this month, Consumer Affairs announced that it had accepted an enforceable undertaking from Melbourne-based Accrue Property.

Consumer Affairs found that Accrue made several false or misleading statements on its website.

One of these claims was that the company could show investors how to use their super funds to “earn an outstanding return, regardless of market conditions or whether capital growth occurs”.

It also claimed the Accrue Landbanking system could turn an investor’s super fund into a “goldmine – to purchase an appreciating asset, without taking a cent out of your own pocket”.

Accrue must now advise current or prospective customers that “no return is ever guaranteed” in relation to investing in property and investing through an

The company has also agreed to remove all false or misleading claims from its website and to submit to a two-year compliance program to ensure all company statements comply with Australian Consumer Law.

Accrue has also agreed to pay $5,000 to the Victorian Consumer Law Fund.

Comment: $5,000 ? They would have made more than that one single property deal. If it has been a financial planning firm they would have been hung out to dry

SMSF industry continues to grow, according to ATO statistics

According to statistics released by the ATO on 17 December 2014, the number of self-managed super funds (SMSFs) has increased by 29% to 534,000 in 5 years and with total assets growing to $557bn. The statistics are featured in the ATO’s report entitled, Self-Managed Superannuation Funds: A Statistical Overview 2012-13.

 

“SMSFs account for 99 per cent of the total number of superannuation funds and 30 per cent of the $1.9 trillion total super assets in Australia,” Assistant Commissioner Matthew Bambrick said.

In 2012-13 SMSFs experienced a positive return on assets of 10.5 per cent, the highest over five years and the fourth consecutive year of positive returns.

It showed that over 5 years to 2012-13, contributions to SMSFs averaged $24.9bn a year on behalf of 64% of SMSF members. Notably, member contributions increased by 5% and exceeded employer contributions by approximately 3 to 1 in 2013. The ATO also reported that it continues to see the proportion of SMSFs with borrowings increase from 1.5% in 2009 to 5% in 2013. At June 2013, SMSF borrowings were equivalent to 1.9% of total SMSF assets. The next publication, based on data for the 2013-14 financial year, is anticipated to be released in December 2015.

Super changes in the 2014 budget

  1. Super guarantee rate of 9.5% on 1 July 2014– Instead of pausing the superannuation guarantee rate at 9.25%, as previously announced, the Government will now increase the SG rate to 9.5% on 1 July 2014 (as currently legislated) and leave it at this level until 30 June 2018. The SG charge percentage will then increase by 0.5% each year until it reaches 12% from 2022-23, a year later than previously proposed. As such, employers are required to increase their superannuation contributions on behalf of employees to 9.5% of ordinary time earnings from 1 July 2014 (as currently legislated).
  2. Option to withdraw excess non-concessional contributions – The Government will allow individuals the option of withdrawing superannuation contributions in excess of the non-concessional contributions cap made from 1 July 2013 and any associated earnings, with these earnings to instead be taxed at the individual’s marginal tax rate. Final details of the policy will be settled following consultation with key stakeholders in the superannuation industry.
  3. Military Superannuation – new accumulation arrangements – From 1 July 2016, the Government will establish a modern fully funded, accumulation superannuation scheme – called ADF Super – for new members of the Australian Defence Force (ADF).
  4. Seniors Health Card – income test – The Government will include untaxed superannuation income in the assessment of income to determine eligibility for the Commonwealth Seniors Health Card (CSHC) from 1 January 2015. All superannuation account-based income streams held by CSHC holders before the implementation date will be grandfathered under the existing rules.