Controversy over super mounts
THE level of controversy and debate swirling around super continues to mount in the final-quarter countdown to the end of the financial year.
The Cooper superannuation review and the Henry tax review along with the growing realisation of the impact of excess contributions are key ingredients in this potent brew. And this is against the background of a rapidly ageing population and inadequate retirement savings.
The Cooper review’s final report will be delivered to the Government by June 30 and the Henry Review is being released two weeks before the federal budget with its own media lockup.
The intense debate in the media and among superannuation professionals about the future of super provides individual fund members with a perhaps unprecedented prompt to take a long hard look at their own super position.
No matter what recommendations are made by the Cooper and Henry reviews, many fund members are likely to more closely examine a range of factors concerning their super. These may include the amount of fees being paid through their funds, their asset allocations, the role of financial planning advice, the adequacy of their retirement savings and the most suitable type of super fund for their circumstances.
A particularly urgent matter that demands many members’ attention is the possibility of paying excess super contributions – particularly given that the annual caps on concessional contributions have been halved from 2009-10.
Smart Investing discussed excess contributions earlier this month – see http://blogs.news.com.au/news/smartinvesting/index.php/news/comments/super_shocking/ – and warnings about the consequences of excess contributions are being covered increasingly in the personal finance articles and specialist tax publications.
Surely, many more members are now focusing on their super savings.
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Robin Bowerman, Vanguard Investments Australia's Head of Retail, has more than two decades of experience in the finance industry as a writer, commentator and editor.