Superannuation Discussion + market volatility

[burmans]

Is there any downside to rolling your super out and consolidating when the market and your super is down like it currently is?

Only that transferring super takes time so in a period of volatility there is a chance you roll out on a down day and roll in on an up day a few days later.

 

[blacksultan]

Only that transferring super takes time so in a period of volatility there is a chance you roll out on a down day and roll in on an up day a few days later.

How long does it usually take? Is there any way around this?

 

[burmans]

Cant 100% remember but from memory when I did this last it was maybe 3 days. I'm not ware of anyway around this, but someone in this industry should be able to help and I'm sure there is someone on this forum. My experience is only as a consumer.

 

[coyote25]

Cant 100% remember but from memory when I did this last it was maybe 3 days. I'm not ware of anyway around this, but someone in this industry should be able to help and I'm sure there is someone on this forum. My experience is only as a consumer.

Three days is basically the standard unless you are rolling money out from an APRA Fund to your new Self Managed Super Fund that can take up to 30 days (noting this will change down to 3 days after March 2021 when SMSFs move to some rollover standards as APRA (Large) Super Funds to APRA Super Fund).

Unless you are talking about telling your super fund to move from one investment option to another (say a ‘cash’ investment option) there isn‘t a standard so up to the individual superannuation fund for when they progress the change. During the GFC some super fund put limits on moving between investment portfolios mostly because they have a lot of money invested in long term illiquid assets (road and other infrastructure).

Unfortunately you really need to make these changes a month ago to avoid the big drops.

Good luck.

 

[CaptJCool]

IMHO

EVEN A Fund like I was Which is somewhat more cautious in has until yesterday copped an 11% drop in 15 days and this after remedial measures post GFC to avoid big losses - and this before today’s further losses....

Had people switched at end of Feb (only can do it at end of month) they would avert 8.5% loss

 

[Pushka]

IMHO

EVEN A Fund like I was Which is somewhat more cautious in has until yesterday copped an 11% drop in 15 days and this after remedial measures post GFC to avoid big losses - and this before today’s further losses....

Had people switched at end of Feb (only can do it at end of month) they would avert 8.5% loss

I peeked into ours last week. I wasn't too stressed as I'd had expected worse. I'm not looking again for a while. Nothing I can do about it.

 

[QF WP]

Yes, you miss the upside like people who got out last week or yesterday as the market corrected today nicely



Last week:



Still lots of action to come from governments and reserve banks - so if you are patient, ride out the volatility. Don’t forget that any contributions going in over the last month (and likely next few) will be buying at the cheaper unit prices, so dollar cost averaging your holding down.

 

[Pushka]

Yes, you miss the upside like people who got out last week or yesterday as the market corrected today nicely

View attachment 209976

Last week:

View attachment 209977

Still lots of action to come from governments and reserve banks - so if you are patient, ride out the volatility. Don’t forget that any contributions going in over the last month (and likely next few) will be buying at the cheaper unit prices, so dollar cost averaging your holding down.

Maybe add - and live a lot longer!

 

[ramboflyer]

The superannuation rort has been a nice little earn for some financial advisers thanks to suckers like me.

I worked for a company between 2003 and 2005 and the superannuation funds were with Colonial Mutual. When I left the company the superannuation funds were then transferred from the company superannuation account to Colonial Mutual superannuation account. That was over 10 years ago.

Fast forward to today and I look at superannuation account to find the balance has decreased from previous year. Why? Only 0.28% growty for the year. Ok so why decrease in balance? Not only are they charging me an administration fee but they are charging me a financial adviser fee. A financial adviser who I have never seen or spoken to ever and they have been taking a cut from my superannuarion. Seriously?

I only just read this but it may be worth following up with a class action currently going on. A real long shot but maybe you can do some research.
I had a policy with Colonial Mutual in the 1980's and the class action is around the company not investing in a manner that was in the clients best interest. There is a link to the Commonwealth Bank there.
The lawyers are Slater & Gordon and there is info on their web site. I have registered but have no idea if I qualify in any way but they are sending me updates. Worth having a look I would have thought.

 

[CaptJCool]

At least, some losses clawed back ...

 

[amaroo]

Read an interesting article on HostPlus and how the Virus could effect them. Given the government has allowed early access for up to $20k they could have issues raising cash to cover. Read like a classic run on the bank.

 

[CaptJCool]

Read an interesting article on HostPlus and how the Virus could effect them. Given the government has allowed early access for up to $20k they could have issues raising cash to cover. Read like a classic run on the bank.

Yea, except what about all the super pouring in this past month?

If it’s still in cash it’s easy to use that cash to pay out the $10,000 claims

 

[amaroo]

Yea, except what about all the super pouring in this past month?

If it’s still in cash it’s easy to use that cash to pay out the $10,000 claims

That’s the thing with this particular fund. Most of the members work in industries that have been devastated and have already lost their jobs, are young (average age 35) and only have an average balance of ~ $37k.

The fund has $54B, but only $2B in cash.

 

[OATEK]

That’s the thing with this particular fund. Most of the members work in industries that have been devastated and have already lost their jobs, are young (average age 35) and only have an average balance of ~ $37k.

The fund has $54B, but only $2B in cash.

I wonder whether when the current crisis passes, we will see the Industry Funds change their tune. All their advertising has been based on growth compared to retail funds, and perhaps they may need to consider balance more if they are easily exposed by a sudden flood of $20k withdrawals.

 

[amaroo]

Here we go.... I'm liking the feeling of being outside this arena with our SMSF.

'Threatens the integrity': RBA should support superannuation access scheme, Labor says

The RBA could provide liquidity support for superannuation funds as struggling workers are permitted emergency access to their nest eggs.

www.smh.com.au

 

[burmans]

Read an interesting article on HostPlus and how the Virus could effect them. Given the government has allowed early access for up to $20k they could have issues raising cash to cover. Read like a classic run on the bank.

If the investors have their investment in something other than cash they sell those assets, Probably the shares first off. Not a great outcome but you don't only pay out with the cash, you also liquidate the liquid assets.

 

[amaroo]

If the investors have their investment in something other than cash they sell those assets, Probably the shares first off. Not a great outcome but you don't only pay out with the cash, you also liquidate the liquid assets.

101 I would have thought.....

 

[exceladdict]

As many commentators have flagged, it's the purportedly overvalued, illiquid assets that should be concerning.

Your Industry Super fund is about to lie to you | Nucleus Wealth

Most superannuation funds have significant balances in unlisted assets. Many are saying that these assets haven't lost money despite sharemarkets being down 30%

nucleuswealth.com

 

[lovetravellingoz]

On an upswing I moved the majority of my super to cash.

I also have a large share portfolio outside of super and so this combined provides me now with a risk/reward balance that I am comfortable with. Especially as I have sole control of my shares.

If the USA gets decimated by CV19 I think that there is a good chance that this could ultimately move the markets a lot lower both there and the ASX. If so I can live of that stored cash (plus also cash that I have outside of super) for many a year in comfort while the share-market slowly recovers over many years.

If we somehow pull through very quickly then yes my cash may miss some of the rebound, but my share portfolio will benefit. If my share value plummets then I still have a good reserve to both live on , and to also switch out of when the time is right.

At almost 60 now is not the time for me to mainly market linked. I have a bet each way.

 

[burmans]

As many commentators have flagged, it's the purportedly overvalued, illiquid assets that should be concerning.

Your Industry Super fund is about to lie to you | Nucleus Wealth

Most superannuation funds have significant balances in unlisted assets. Many are saying that these assets haven't lost money despite sharemarkets being down 30%

nucleuswealth.com

Yes agree, was only noting that it's sloppy reporting to only focus on the cash. Given many balanced funds have 50% in shares as well as their cash/fixed interest investments it would take considerably more of a run on those assets than is implied by the 50bn vs 2 bn implied in the article.