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Super Reforms
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Bill Shorten, Australia's superannuation minister, unveiled the government's new Stronger Super package this month, which outlines in depth which recommendations they are and are not supporting.
The Government based its response around the idea that Superannuation is the largest source of long-term savings in Australia and a critical part of the Australian economy.
The intention of the reforms is to remove unnecessary costs and better safe guard the retirement savings of all Australians. Whether this is realistic and achievable is still a matter for debate.
Recommendations supported:
 Superannuation funds will be able to offer MySuper products from 1 July 2013.
They will replace existing default funds after an appropriate transitional period.
Super fund trustees wanting to offer a MySuper product will be required to hold a specific MySuper license issued by the Australian Prudential Regulation Authority (APRA).
The Government will determine the types of fees that can be charged by MySuper products. No entry fees and limits on exist and switching fees are most likely to be included.
The use of Tax File Numbers (TFN) will be used as the primary identifier of member accounts from 1 July 2011.
Through the Governments 'Stronger Super' initiative employees will receive information on their pay slips about the amount of superannuation actually paid into their account.
Super funds will be required to provide employees with electronic notifications if regular super payments are not being made.
The Next Step:
The Government is currently establishing consultative groups in early 2011 to discuss the measures and consult the design and implementation of them.
For more information on the Governments response to the review, the Stronger Super package can be found at www.strongersuper.treasury.gov.au.
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How much super is enough?
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As we are all now living longer, there are more people relying on the Government Age Pension than ever before. However, recent research1 shows that the Age Pension will not be enough for an average couple to enjoy even a modest lifestyle in retirement.
Modest vs Comfortable Retirement:
In the most recent report3 about retirement savings by The Association of Superannuation Funds of Australia (ASFA), they define "modest and comfortable" as:
Modest lifestyle in retirement: A better lifestyle than offered under the Age Pension, but limited to fairly basic activities. To achieve this lifestyle a couple would need to spend $30,382 a year4.
Comfortable lifestyle in retirement: enabling an older, healthy retiree to be involved in a broad range of leisure and recreational activities and to have a good standard of living through the purchase of such things as household goods, private health insurance, a reasonable car, a range of electronic equipment and domestic and occasionally international holiday travel. Those seeking a modest retirement need to spend $53,456 a year4.
What do you actually need for retirement?
To give you a realistic idea of what you may need for retirement, based on the figures above, take a look at the following table. It shows the lump sum amount you'd need upon different retirement ages for both a modest and a comfortable retirement.
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Age
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Modest
Single
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Modest
Couple
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Comfortable
Single
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Comfortable
Couple
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60
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$314,931
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$456,217
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$586,841
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$802,696
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65
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$282,487
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$409,297
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$526,384
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$720,002
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Source: Western Financial, Assumptions: Net return of 8% pa, 3% pa inflation, no allowance for Age Pension, projections to age 86 (ie the female life expectancy at age 60 and 65). All figures in today's dollars.
So, what does this all mean?
This is bad news. ASFA found the average payout to be much lower than the figures above, with women retiring on $63,000 and men on $136,0001. If you do the quick math you will see that, even to enjoy a modest retirement lifestyle, a single women would only have enough money for about two years, while a couple could only exist on their savings for about seven years.
When you add to the mix the things you can enjoy on a comfortable budget versus those you can't on a modest income the reality hits home.
Where to from here?
Obviously, nobody wants to be in this situation. To avoid it and lead the sort of retirement you want, you need to make sure you have enough money saved. You can easily work out how much you'll need by using our online projection calculator under the members tab at www.walgsp.com.au.
Simply fill in the gaps where prompted with your information and our calculator will do all the rest. It will even tell you how much you need to be saving each year to get you there.
If you think you need to start saving extra to reach your goal give us a call on 08 9480 3500 to discuss the options available to you. Alternatively visit our comprehensive website at www.walgsp.com.au/Members/Contributions.aspx for ideas on how you can boost your super now!
1 Retirement Savings Update, ASFA Research Report, February 2008. 2 Submission to the Productivity Commission, Dr Diana Olsberg, Director University of New South Wales Research Centre on Ageing and Retirement. 3 Westpac ASFA Retirement Standard, June 2010. 4 Westpac ASFA Retirement Standard, June 2010. Figures assume home ownership.
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Interesting Facts about Christmas
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In the Ukraine, if you find a spider web in the house on Christmas morning it is believed to be a harbinger of good luck!
A traditional Christmas dinner in early England was the head of a pig prepared with mustard.
Nearly 60 million Christmas trees are grown each year in Europe.
Visa credit cards are used 5,340 times each minute during the holiday shopping season.
Christmas shopping may be hazardous to your health. It you are an avid Christmas shopper statistics have concluded that you will be elbowed at least three times while shopping.
If you received all the gifts that were given in the song "Twelve Days of Christmas" you would receive a total of 354 gifts, this amounts to a gift given for each day of the year.
56% of Amercians sing holiday carols to their pets.
From 1647 - 1669 the English Parliament passed a law that made Christmas illegal. It was banned by leader Oliver Cromwell, who considered celebrating on the world's most holy day to be immoral. Anyone caught celebrating was arrested.
Kris Kringel, a man in his 40's, lives in the North Pole, Alaska, and delivers pizzas for a living. He drives a 1984 Ford Tempo.
1 in 6 men would like to get rid of all the "gift-giving nonsense."
1 in 3 men will wait until Christmas Eve to finish their shopping.
Saint Nicholas of Myra, the original Santa Claus, was the patron saint of children, thieves and pawnbrokers.
Facts sourced from ChristmasFacts.net and wierdthings.org.uk/topic/weird-facts/
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Christmas Recipe
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Are you stuck on finding something different to serve for sweets at this years Christmas lunch or dinner? Or perhaps wanting to make something to give away to your family and friends?
To make your life a little bit simpler I asked around the office to see who had a delicious Christmas recipe idea they were willing to share. Below is the recipe for the favourite and most divine recipe of them all:
Baileys Rocky Road Fudge
Makes
12 Slices
Ingredients
50ml Baileys Irish Cream liqueur
200g good-quality dark chocolate, roughly chopped
20g unsalted butter
1/3 cup (100g) sweetened condense milk
50g chopped unsalted pistachio kernels
75g roughly crushed shortbread biscuits
200g mini marshmallows (or regular, chopped)
150g white chocolate roughly chopped
Method
1. Grease an 8cm X 20cm bar pan. Line with baking paper, leaving some overhanging.
2. Place Baileys, dark chocolate, butter and milk in a heatproof bowl over a pan of simmering water (don't let the bowl touch the water). Allow to melt, then stir gently until smooth. Remove from heat and cool slightly. Stir in nuts, biscuits, marshmallow and 100g white chocolate. Spread mixture into pan, then chill for 2-3 hours until firm.
3. Melt remaining 50g white chocolate as before. Drizzle over fudge, leave for 3 - 4 minutes to set, then cut into squares. The fudge will keep in an airtight container in the fridge for up to 1 week.
To print this recipe or view other scrumptious Christmas recipes visit www.taste.com.au
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Disclosure and Disclaimer: Any advice in this email is of a general nature only. It doesn't take into account your specific objectives, financial situation or needs and you need to consider whether it is appropriate for you before acting on it. You should carefully read the Product Disclosure Statement of the Fund before becoming a member.
The WA Local Government Superannuation Plan accepts no liability for any damage caused by this email or its attachments due to viruses, interference, interception, corruption or unauthorised access. This notice should not be removed.
WA Local Financial Services Pty Ltd trading as Western Financial is an Authorised Representative (AR# 302707) of WA Local Government Superannuation Plan Pty Ltd RSE License No #L0001137 RSE Registration No #R1004380 AFSL #269006
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