Ask the Expert: Facing the tough reality of a collapsed super fund
Thousands have been caught up in recent Shield and First Guardian collapse leaving them with an uncertain future. Here’s what to know.
Question 1
Hi, like more than 12,000 others, I’m mixed up with the mess of my super fund going into liquidation.
We are not sure if we will get any money back. My question is, I was meant to be stepping back my hours at work and semi-retired and now I don’t think I can.
I have only $11,000 in a new fund (I’ve lost more than $190,000 in super from my old account), $7500 invested on the sharemarket, $3500 shares in Coles and $5000 in my bank.
Robert
Hi Robert,
Yes, this is a very unfortunate situation. As you have said, thousands have been caught up in recent Shield and First Guardian collapse. It’s not only the money, but of course this puts a lot of emotional stress on people.
There is some hope, as ASIC have frozen the funds and liquidators are seeing how much can be recovered. However, this may take some time.
You might like
ASIC is keeping investors updated via Shield Master Fund | ASIC and here First Guardian Master Fund | ASIC.
The Australian Financial Complaints Authority may also be able to help. It has a dedicated webpage here.
You will have to re-set your expectations. Perhaps see if you can work a little longer than originally planned to build up some further super.
Fortunately, in Australia we do have a pretty good safety net in the age pension, which is available from age 67.
Question 2
My partner and I have lived away from Australia for 10 years, currently in New Zealand.
My partner, 75, is an academic and is still working, although he intends to retire next year. I am 72 and retired. We want to return to Australia next year.
We have an apartment in Sydney, which we intend to sell and a house in New Zealand, which we will also sell. This will give us enough to buy a house outside Sydney and hopefully enough to retire on.
Are we too old for a superannuation fund? When we left Australia 10 years ago we used our super to pay down the mortgage on the Sydney apartment.
Any advice or some direction would be greatly appreciated.
Stay informed, daily
There is no maximum age to open a new superannuation account. However, there are age restrictions on contributing to super. Therefore it’s not practical for some to open an account.
Once you are 75 or over, the only type of super contributions that can be accepted are employer SG contributions, and down-sizer contributions.
If you have held the Sydney apartment for more than 10 years and lived in it for some part of ownership, you may both be eligible to make down-sizer contributions to super.
Additionally, as you are under 75, you can still make other types of contributions, including after tax non-concessional contributions.
I suggest speaking with your preferred super fund about these types of contributions. You should also consider seeking personalised financial advice around this, and your broader retirement plans.
Question 3
I will retire in January 2026 after 41 years in the public service. I will retire with the full Public Sector Superannuation pension.
I recently asked ComSuper for a benefit estimate, which shows three components – tax free, taxable taxed and taxable untaxed. But underneath is this statement: “The gross pension will be counted towards your transfer balance cap. Based on this estimate, the above pension would be valued at $2,319,066. This is over the current cap.”
Can you tell me the exact implications of this pension being valued over the TBC? I know that it will reduce the 10 per cent rebate that will be applied to the taxable portion of my pension. But after reading the ComSuper and ATO guidance, I can’t figure out whether there are any other implications.
Note that my PSS pension will be my only income in retirement. My wife will probably keep working for another couple of years before retiring with superannuation in a regular accumulation account. Thanks, Anura
Hi Anura,
It’s a bit tricky to provide a definitive answer without having the full picture of your financial information and your age – these details are crucial in determining the exact implications of your pension being valued over the transfer balance cap.
Your best course of action would be to consult a financial adviser who can provide tailored advice specific to your circumstances. This will allow you to get a clear picture of any possible impacts and plan accordingly.
In the meantime, the Transfer Balance Cap| Pensioners page on the CSC website provides an example of a member (Jo) whose scenario is similar to yours – this is worth checking out.
Craig Sankey is a licensed financial adviser and head of Technical Services and Advice Enablement at Industry Fund Services.
Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.
Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.
