They're Coming for Your Super
There are more warning signs that the government is looking to lock your money away. It's the latest move that demonstrates they think your savings are theirs to control.
There are more warning signs that the government are coming for your retirement money.
The Australian Financial Review revealed yesterday that there is a move toward automatically rolling superannuation money into annuities when people retire.
This would be a profound change from the current system and effectively makes your money, their money.
Here's how it currently works.
When you retire, you can withdraw lump sums from your super for whatever purpose you like. After all, it is your money and if you take it out of the tax-free super space then you suffer the consequences.
It's far from a perfect system because it allows people to squander their nest-egg on anything and revert back to reliance on the public system.
However, the most important principle is that it is your money and so you should always be in charge of how it is used.
Here's what is proposed.
When you reach superannuation access age, your lump sum will be automatically commuted to an annuity which will pay you an annual sum of money. Your money will have to remain within the superannuation system, allowing the fund managers to continue to profit from your savings.
Not surprisingly, this is being pushed by some of the biggest funds who dominate the space.
One voice of truth has emerged with "the $150 billion Aware Super, says defaulting customers into retirement products is “an easy, self-serving view”, warning that while it is simpler for funds, it may not lead to the best result for consumers."
Confidential Daily readers were warned of this move as the attitude of government, and the big industry super funds, is that your savings are theirs to control.
That's why this pension move will just be the first step.
It'll be justified as providing certainty for people in retirement and 'preserving' the original role of super as a replacement for the public pension. A lot of unsophisticated investors will fall for the rhetoric.
The next step will be for your superannuation balance to have limited inheritence rights. My guess is that it will be ok for a surviving spouse to inherit your super balance - as long as it stays within the super pot.
The intention will be to stop money exiting the system via an inheritance to children or outside beneficiaries.
It may be that inheritance will be allowed to another generation but again, as long as it is retained within the superannuation environment.
That's the best case scenario.
The worst case would be that your super balance is forfeited to the government upon your death.
That becomes a de-facto death duty, a long cherished idea of the Left.
Every government over the past two decades have promised not to change the superannuation system and yet every government has made changes.
The net effect has been to have undermined the confidence and integrity of the system that showed so much early promise. Every change is designed to benefit government and disadvantage those within the system.
In Labor's case, they know that protecting the control of Industry Super Funds directly helps their political cause. The flow of donations, jobs for the comrades and 'directable' funds all help their election campaigns.
The Coalition, like every government just want more money from the system although there are some who are opposed to the compulsory nature of the system.
These latest moves are a reminder of why we all need to pursue savings and investments outside of government control and influence.