I suspect it isn't just an IT matter. A full audit, including one involving processes, is probably required and may involve outside bodies such as APRA. It would not surprise me when these situations occur, external audits are necessary.
Superannuation, the ultimate government cash cow?
- Thread starter drsmith
- Start date
I suspect it isn't just an IT matter. A full audit, including one involving processes, is probably required and may involve outside bodies such as APRA. It would not surprise me when these situations occur, external audits are necessary.
- Joined
- 8 June 2008
- Posts
- 14,706
- Reactions
- 22,348
Why would an audit require any multi day locking?
You take a snapshot of the database overnight and you can audit it after for decades if you want.
So even with technical incompetence involved, no excuse....
As this is not the only instance, it is probably worthwhile to try to read behind : why would that be?
I have 2 possible causes, anyone else?
Did anyone try to play smart and not actually process your direct share instructions so created a blackpool distinct from the market and funds now need to reconcile with the market?
Or would super funds have private investments in their books with pretend valuations so off that it becomes a legal liability and only a month break allows the duration needed to smooth the hit?
But often, these fxup ups are just incompetence more than conspiracy theories.
Really happy to move out of these
- Joined
- 14 February 2005
- Posts
- 15,838
- Reactions
- 19,129
There used to be defined benefits schemes that involved sacrificing a portion of salary in return for a benefit upon retirement that was as per a formula, it wasn't dependent on any particular investment and its performance.
Most of those were closed off ~30 years ago though.
I haven't been involved in a superannuation fund where it is changing providers, so I don't assume it is simple as some believe it is. Maybe you have and it is black and white from an IT perspective.
- Joined
- 28 May 2020
- Posts
- 7,417
- Reactions
- 14,512
One can only hope it is. While it does not impact me, to impose a penalty on those who were adhering to the laws applicable at the time, is grossly unfair.
Yes, the amounts in some superannuation funds look obscene but in my view that is the operation of the Law of Envy. I get a bit tired of the vilification of those who may receive say $200k pa in tax-free pension. That's blaming them for what the law allowed.
- Joined
- 20 July 2021
- Posts
- 13,696
- Reactions
- 19,069
absolutely
regarding the nest-eggs some have accumulated .. well , they were encouraged to do so by previous Governments ( not just permitted ) as a way to reduce those on the aged pension for those who could sustain their retirement years independently .
I'm not sure that is what the article is suggesting.
More that Mr Gregg may have been misleading.
- Joined
- 20 July 2021
- Posts
- 13,696
- Reactions
- 19,069
even the mention ( discussion ) of unrealized gains runs a chill down my investing spine
once imposed in just the tiniest of situations , where does it stop ( when nobody invests in anything , perhaps ) ?
- Joined
- 8 June 2008
- Posts
- 14,706
- Reactions
- 22,348
Is that how you read it? Wishes more than text,?
I do not read it as a given abandoned attempt at all
When I said "hope" it was more in the forlorn sense. Div 296 provisions are still in the Budget papers and the legislation is still in the Senate i.e. under consideration.
www.aph.gov.au
Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023
Helpful information Text of bill First reading: Text of the bill as introduced into the Parliament Third reading: Prepared if the bill is amended by the house in which it was introduced. This version of the bill is then considered by the second house. As passed by
- Joined
- 13 August 2006
- Posts
- 1,070
- Reactions
- 1,470
I have no doubt that Div 296 will go ahead now that Labor's position in the senate is strengthened.
I also think they will now have the power to push their intended method of determining the profit of the super account, which means the taxing of unrealised gains.
My only hope is that they tell the greens to go jump and don't lower the application limit from $3m to $2m.
It would be nice if Labor compromised and agreed to index the limit, but I don't think they will. They are going to use their new power on this.
I also think they will now have the power to push their intended method of determining the profit of the super account, which means the taxing of unrealised gains.
My only hope is that they tell the greens to go jump and don't lower the application limit from $3m to $2m.
It would be nice if Labor compromised and agreed to index the limit, but I don't think they will. They are going to use their new power on this.
Dona Ferentes
Did the Thessalonians write back?
- Joined
- 11 January 2016
- Posts
- 20,124
- Reactions
- 27,759
according to the AFR today
.. to me that does not seem right. Not a bell curve fit.
Super tax more likely, Greens stand firm on $2m demand
Election gains by Labor and the Greens make it more likely big superannuation balances will be hit with more tax – and the measure may kick in at $2 million.
Dona Ferentes
Did the Thessalonians write back?
- Joined
- 11 January 2016
- Posts
- 20,124
- Reactions
- 27,759
but if the $2M was indexed, that would provide some clarity "going forward"
according to the AFR today
.. to me that does not seem right. Not a bell curve fit.
Super tax more likely, Greens stand firm on $2m demand
Election gains by Labor and the Greens make it more likely big superannuation balances will be hit with more tax – and the measure may kick in at $2 million.www.afr.com
Not only are they misleading they are likely to be incorrect. I wouldn't really expect people to go and read the Explanatory Memoranda which is along side the Bill because it is boring but there are some aspects in it which indicate even at $3m the numbers impacted are wrong.
It appears to me all that has been done is looking at SMSF's with values over a certain point and so the 80,000 level was derived.
This is what is being spruiked by many
However, the numbers impacted by this lot haven't been stated. So, yeah, I think it definitely will be greater than the current 80,000.
For those affected by dot point one, they cannot do a thing as there is no actual fund and the amount calculated is notional (annual pension x 16.) Sure it means a DB of around $187k and I certainly wouldn't mind that but keep in mind it is already taxed.
- Joined
- 8 June 2008
- Posts
- 14,706
- Reactions
- 22,348
Not indexing it will probably get the clarity of get the f out.
- Joined
- 13 August 2006
- Posts
- 1,070
- Reactions
- 1,470
Interesting.
I get a fortnightly defined benefit pension from the CSS that has an associated notional value. i also have super accumulation and pension accounts.
My understanding is that the CSS fund doesn't actually generate any earnings. If I was over the $3m limit, Div 296 tax of 30% on zero CSS earnings would be zero, so the defined benefit would not be double taxed.
If, however, the notional value of the CSS defined benefit pension caused me to exceed the $3m limit, I would then be up for Div 296 tax on the earnings of the super accumulation and pension accounts for the balance greater than $3m.
I might be totally wrong about this. It's as clear as mud. I wish they would just stop tinkering with super!
- Joined
- 20 July 2021
- Posts
- 13,696
- Reactions
- 19,069
so does nearly everybody ,
but i strongly suspect they will not ( or can't , because it is so addictive )
$3 million won't be so much if inflation takes another leap upwards ( and i see that as a real danger ) at best i see any attempt at indexation as .. tardy
The situation is confusing to me. I don't profess to know the ins and outs but say some lucky dude has a DB of 200k pa. Multiplied by 16 the notional value is $3,200,000. As it it exceeds $3m then a tax would be levied on the $200k. It's not about earnings as such. Where they get the money to pay the tax, I haven't a clue as no actual fund exists for them. It's all notional.
The assume a person has a lesser amount of DB, say $80k pa, and another superannuation fund valued at $2m. The numbers work out ($80k pa x 16) + $2m = $3.28m. It exceeds the $3m so tax would be levied on $280k.
That's my understanding which is a simple one. It'll be more complicated than that but as far as I can work out that is how this proposal will broadly operate.
Edit: Found this. It's a doozy.
Div 296 will tax unrealised gains and more | Leading SMSF Law Firm
The Treasury Laws Amendment (Better Targeted Superannuation Concessions) Bill 2023 (Bill) proposes to insert new Division 296 (Div 296) into the Income Tax Assessment Act 1997 (Cth) (ITAA) to impose an extra 15% on certain member’s superannuation balances. Broadly, from 1 July 2025, the Div 296...
www.dbalawyers.com.au
Last edited:
- Joined
- 13 August 2006
- Posts
- 1,070
- Reactions
- 1,470
For the first case, it is only if the $3.2m notional value grows to, say, $3.3m, then the $100,000 growth is the earnings of the fund and attracts the tax. However, I think the notional value stays the same for the life of the pension, so no growth and no tax.
If the lucky guy's DB is indexed, maybe the notional value is recalculated when his 200k pa grows? Dunno.
For the second case, my understanding is that the tax is levied not directly on the $280k, but on the earnings of the $280k. Perhaps $28k to be taxed at 30%.
Maybe that is what you were saying. All I know is that my brain hurts.
Similar threads
