Further demonstration of the corrupting effects of Superannuation

In this morning’s AFR, it is reported that:

QSuper, Sunsuper in merger talks for $182b fund.

Fascinating.  Impressive eh.

But where is the usual language around mega mergers?  You know, subject to ACCC review/approval?  You know, those pesky competition thingeys.

The AFR further say:

A merged entity would be bigger than the nation’s largest fund, AustralianSuper, which has $170 billion.

So let’s get this right.  Banks can’t merge.  2 Supermarkets dominate the market and allegedly bully suppliers.  Petrol, electricity, telco, blah, blah, blah.  All under the close eye of the ACCC.  Yet not only does the ACCC not seem to care about Industry Fund consolidation, but APRA is in fact encouraging this.

It has already been demonstrated that there have been attempts to bully the boards of these large industry super funds to bully companies (see BHP and maritime) and who knows what pressure has been exerted onto the management of companies by Industry funds where such activity has not been leaked to the media.

But the ACCC, does not seem at all interested:

A wave of mergers is sweeping the $2.8 trillion super system.

A tie-up between First State Super and Vic Super is due for completion next year. The merged entity will control $93 billion in assets, putting it third behind QSuper-Sunsuper (if that deal goes ahead) and AustralianSuper.

Hostplus and Club Super finalised a tie up on November 1.

So Mr Sims?  Where are you?  Still chasing that free range egg disclosure business?

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35 Responses to Further demonstration of the corrupting effects of Superannuation

  1. stackja

    Different rules as usual.

  2. Shy Ted

    Good job we’ve got the liberals in our corner.

  3. struth

    Sco Mo May give a speech about it………………………………………………………..

  4. RobK

    I have avoided investing in super up-to now, preferring to utilise my own money creating wealth(most of the time) and enjoyment in my own business. Soon I hope to sell a major asset and it maybe prudent to put a slice into a superfund because it has obvious tax advantages and i am over the “preservation age”, so effectively the funds are no longer tightly locked up. Looking over lists of providers, the returns are the first feature many seem to quote but to me the schedule of fees is the eye opener and will determine where my money goes. I interpret fees as the sum of regulatory complexity and greed. Government can directly address the former. If they want to encourage savings, don’t tax interest so much.

  5. RobK

    I should have said: regulatory costs, fixed &running costs and greed.

  6. struth

    So it’s basically joining two unions together with compulsory membership (taxpayer’s) money to play with to give them even more power and money to harass business and own the Labor Party, and to ensure communism is our very near future.

    Australia, the most corrupt country on earth because they legalise it.

  7. Tel

    So let’s get this right. Banks can’t merge.

    Advance Bank, absorbed into St George.

    Wespac (largest bank) can snarfle up St George.

    Bank of Melbourne also grabbed by Westpac.

    Sure looks like bank can merge.

  8. Diogenes

    and it maybe prudent to put a slice into a superfund

    At the markets the ALP had a stand & the guy was banging on on about super. He didn’t like it when I said it was that fuckwit Shorten’s fault, that now that I can afford to add more than the employer contribution to my super, I will be penailsed if I do… “How so?” “You remember that little campaign2 years ago about people using super as estate planning?” “er yeh?”, “When my step father passed away, after paying out my mortgage, I had 150k ready to put in to so I could basically double what I had, because of the Shortfilths campaign I would have lost 50k of that straight away, and I was prepared to put in the 30k I was paying into my mortage… well know that annual limit the stupid fucking liberals put in as a result of Shortfiths’s campaign, my employer already contributes 15k of that 25k, so I am spending money. As I don’t have anywhere near enough , and cannot hope to top it up, I hope you enjoy working one day a week to pay my pension in 7 years”.
    limit,

    If you put over 25K in 12 months you will pay 30% tax

  9. Sean

    The wouldn’t be so big if retail super funds hadn’t lost the trust of so many people!

  10. RobK

    The wouldn’t be so big if retail super funds hadn’t lost the trust of so many people!
    Not sure what you mean but establishing a self managed fund is uneconomic unless you have a sizeable kitty.
    The retail funds have a formidable regulatory ring fence. Compulsion isn’t trust.

  11. RobK

    a self managed fund is uneconomic unless you have a sizeable kitty.
    And a passion for paperwork.

  12. eb

    Hi RobK, what would you view as “a sizeable kitty”?

  13. RobK

    Eb,
    I have no particular expertise in this field. I am looking at a kitty of the better part of a million dollars and the prospect of compliance via self management is not looking very attractive but I have an aversion to paperwork. Id rather just do business but that’s kind of incongruous to retirement.

  14. Jonesy

    Union super? You mean those funds that invest in union built high rise apartments, artificially inflate the value of said units which, in turn, artificially inflates ROI. Returns get written to the bottom line of the balance sheets. The return inflates the interest returned to the accounts of superannuants…in simple terms, if you are retiring out of a union super fund within a decade, well done! Just heaven help the mess that will be created when this ponzi scheme crashes out when all this imaginary profit must be realised….incidentally, which fund is paying for Eagle Wharf in Brisvegas? Some extraordinary work practices going on at that site…down tools when temps go past 28C and/or 75% humidity…not to mention $200k for the lollipop operators.

  15. feelthebern

    Not sure what you mean but establishing a self managed fund is uneconomic unless you have a sizeable kitty.

    Not so.

  16. feelthebern

    And a passion for paperwork.

    Also, not so.

  17. Infidel Tiger

    The paperwork can easily be outsourced.

  18. RobK

    The only reason super looks attractive to me is because the tax incentives, not the investment security. Effectively I’m looking to pay big fees to minimise tax. (Aren’t most tax payers)

  19. eb

    Yeah RobK, I agree with ftb. A decent accountant with a good auditor connection should be able to do all the year end paperwork and regulatory compliance bibs & bobs for about $3-4k all up. Provided your investments are in listed entities and TDs, and you don’t have too many trades in a year.

  20. feelthebern

    Hey Zeus.
    My smsf is not vanilla.
    But my annual costs ex bro is only around 2k.
    The secret is making sure your accountant & auditor have all the data feeds set up.
    Means that everything is captured & takes zero time.

  21. Rusty of Qld

    TAFKAS, dead right about super funds sitting on boards and directing the investments into renewables and all other soicial justice dreams (wanks). Just a matter of time and collusion with our two left and very lefty political parties to bring in a tax on the irristible 3 trillion super pot. Mark my words.
    Poor fellow my country.

  22. feelthebern

    to bring in a tax on the irristible 3 trillion super pot

    They already bloody have.

  23. hzhousewife

    The secret is making sure your accountant & auditor have all the data feeds set up.
    Means that everything is captured & takes zero time.

    RobK, I agree with ftb and eb. Ask around, you might be surprised.

  24. Sean

    Something like netwealth might suit you if you want to pick your own investment strategy but also not deal with being a SMSF

  25. Well of course the Legalised Theft Division of the Labor Party (Union Super) are consolidating, makes it so much easier when the thieving spivs seize control of the funds under the guise of saving the economy…that they wrecked.

    Don’t panic, all your money will be “invested” in Super NBN and Super NDIS and Super BER and Super Desal to stimyalate da economymonymonymony and retirees will receive a “fair” stipend from what remains of their hard earned Super of about $100 a week.

    In other words we’ll be back to the State pension and the biggest theft of wealth in the history of the world will be complete.

  26. bollux

    I remember the ACCC came down pretty hard on the video rental business, so don’t be too tough on them.

  27. feelthebern

    Mr Rusty, that’s why they can take my smsf FROM MY COLD DEAD HANDS.

  28. Peter Greagg

    In my experience, $500k is enough to make a self managed super fund worth while.
    Audit and fees $2-4K pa.
    The other alternative is use Australian Super or Host Plus etc to choose your own investments. They have lists of investments that they allow. I use index trackers from Vauguard. MERs of less than 0.2% pa.

  29. FelixKruell

    This is a difficult one. You want economies of scale so that lower admin fees can be charged to members. But enough competition so that lower admin fees are actually charged to members.

    Also, diversity in super funds only matter if employees get a choice of fund. Fix that first.

  30. Rusty of Qld

    feelthebern, not just the 15% personal contributions tax, thats not getting enough, slip in a 1% tax on the whole pot to start with then jack it up over time. 30 Bill on 1% to start with, their creaming their jeans just thinking about it but don’t know how to kick it off.

  31. Mr Rusty:

    Don’t panic, all your money will be “invested” in Super NBN and Super NDIS and Super BER and Super Desal to stimyalate da economymonymonymony and retirees will receive a “fair” stipend from what remains of their hard earned Super of about $100 a week.

    Just like the Nazis did – made the superannuation/banks/etc buy investment bonds and built the autobahns. And built up the economy to re arm Germany.
    Everyone made money like mad bastards until 1945.

  32. RobK

    Thanks, I’ll check it out further.

  33. Ahem…

    http://catallaxyfiles.com/2012/05/15/guest-post-is-superannuation-a-socialist-plot/

    What we must recognise at this early stage of union involvement in the Superannuation issues is that control over the funds will provide unions and governments with considerable financial leverage. That leverage can be used to advance the cause of Socialism in Australia.

    There you have it. Bob Hawke and his hunchbacked gimp Keating were sitting there like Moriarty with a long coat and a red right hand.

  34. Squirrel

    And why would it be that some, in the Middle Kingdom, apparently believe that the Strayan superannuation system is (further) proof that Marx got it right……?

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