Super changes 'not a hammer blow'

Superannuation Minister Bill Shorten says the changes won't be a  "hammer blow'' to people. Picture: Brad Hunter Source: The Australian

AUSTRALIAN workers will not forego potential pay rises as their employers foot the bill for compulsory increases to superannuation payments from July 1, Superannuation Minister Bill Shorten said.

In Brisbane today, Mr Shorten said increases to the superannuation guarantee from 9 per cent to 9.25 per cent in two months' time was not going to burden business and stop workers from getting a pay increase.

"I do believe that the modest increments we've proposed, we'll see people acquire more savings in retirement but it's not going to stop people getting a real wage increase,'' he said.

"I certainly believe that for most Australians it will be part of the mix of remuneration that will be worked through.''

The super guarantee of an employee's ordinary time contributions was originally set at 3 per cent and increased to 9 per cent in July 2002.

Mr Shorten said the incremental increases including the 0.25 per cent increase in July would not be a "hammer blow'' to people.

"When the superannuation legislation came in in 1992 ... what happened in the time was that superannuation went from 3 per cent to 9 per cent and unemployment fell by half,'' he said.

"It never led, increasing super from 3 per cent to 9 per cent, to a wages spike ever but real wages still grew during that time so I would submit to the confidence of history to demonstrate what I'll think will happen in the future.''

Mr Shorten also announced the hand-picked five members of a group that would oversee a Charter of Superannuation Adequacy and Sustainability.

He said the group would help guide the Reserve-Bank style Council of Superannuation Custodians established last month.

"Their task will be to advise on whether any of the proposed changes to Australia's superannuation by the Government of the day of whatever political stripe are consistent with an agreed charter of superannuation adequacy and sustainability,'' he said.

"The council itself will be an impartial and expert apolitical body that is able to act as custodians or stewards of a superannuation system reporting to Parliament on its sustainability.''

They will assess the future policy against the Charter and provide a report to be tabled in Parliament.

The charter group will include former Federal Court judge Alan Goldberg, the deputy chairman of the Australian Prudential Regulation Authority, Ross Jones; former Cooper Review chairman Jeremy Cooper; former Australian Super chair Elana Rubin and former MLC chief executive Steve Tucker.

Mr Shorten said superannuation in Australia today was worth about $1.5 trillion and is expected to rise to around $6 trillion by 2037.

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Nest eggs will require check-ups

It's time to give your super savings a health check. Source: Supplied

UNLESS you're heading towards retirement or a decade or two away from it, you're probably avoiding looking at your super.

In fact, you'll groan at the thought of it.

There's no better time than now to do what many of us will put on the "to-do" list but never quite get there - a superannuation check-up.

Your Money has asked the experts how you check on the wellbeing of your retirement nest egg.

> Consolidate accounts

There are more than 3.4 million "lost" super accounts totalling $16.8 billion and more than 2.8 million "unclaimed" super accounts worth $887 million in Australia.

Untouched super accounts are already being transferred across to the Australian Taxation Office and all will be moved over by May 31, so now is the time to get your money.

To find out if you have lost funds, jump on to the tax office's SuperSeeker website (ato.gov.au/superseeker) and then contact your fund of choice to have it rolled in.

> Use a super calculator

Super research firm Chant West director Warren Chant says the simplest way to check on the progress of your super is to visit MoneySmart's website (moneysmart.gov.au) and use the superannuation calculator.

"Superannuation is all about saving for a nest egg that will give you a comfortable retirement," he says.

"If it's a long way short of that comfortable lifestyle, then you should be doing some things about it.

The calculator will help you work this out. It can be a bit of a wake-up call."

The Association of Superannuation Funds of Australia latest figures show that to achieve a comfortable retirement a single person needs $41,186 a year and a couple requires $56,339 a year.

> Check insurance levels

Chant says all super members should do an insurance check to see if they have ample cover in case of sickness, injury or death. "Australians are generally underinsured," he says.

"If a couple with two kids sat down and worked out if one of them fell off the perch what would happen to the remaining spouse and children? Would your life insurance cover you for that?

"Or if you had a bad accident, would life insurance cover you."

Insurance cover within super often includes death cover, total and permanent disability (TPD) cover and income protection.

> Investment options

There are a range of investment options for super members including balanced, growth, conservative and cash, however most Australians let their fund choose for them.

Australian Super's head of advice Frank Ceravolo says it comes down to how much control a member wants to have as to whether they tailor their own investment options.

"The first step for a member is to check what option they are in, by going online or contacting your fund," he says.

"Then it's a case of thinking about what you are looking to achieve, the overriding thing is super is going to be a long-term investment for most of us.

"Different investment options obviously have different risk characteristics ... then it's about choosing what is best for you." Ceravolo says if you still can't make a decision, contact your fund and ask for some relevant advice.

> Choosing beneficiaries

Members have restrictions on who they can elect to be a beneficiary of their super fund after death. Ceravolo says it's an important choice to make.

"In terms of who can be nominated, it is generally a dependent, or your estate," he says.

"Your estate is generally your legal personal representative and it (your super) will become part of the assets of your will, but that may not be the best way to do it for tax purposes.

"If it goes to a dependent, it is tax-free."

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Funds report super returns for retirees

Source: Supplied

THE average retirement nest-egg has grown by more than 12 per cent so far this financial year, the strongest performance by superannuation funds since before the global financial crisis.

Two separate analyses have revealed median balanced superannuation funds - the most common variety - have soared by more than 12.5 per cent since July, the best result since 2007.

In the past decade, the average superannuation nest egg has grown 7.2 per cent each year.

That number more than halves to an average of just 3.2 per cent when the past five years of returns are calculated, with the GFC to blame.

But Chant West director Warren Chant said that with another quarter to go it appeared Australians were on track for pre-GFC double-digit growth in their retirement savings this financial year.

"This year looks as though it's going to be another really good year," he said. "It's been a terrific nine months and in the last 12 months and for the year to March, they've earned 11 per cent; for the nine months it's about 13 per cent."

Chant West said shares and listed property were the best performers in the March quarter - Australian shares increased 8 per cent.

Australian and global Real Estate Investment Trusts (REITs) increased by 5.3 per cent and 8.8 per cent respectively.

However bond markets weren't as successful, Australian and international bonds rose by just 0.2 per cent and 1.2 per cent respectively.

SuperRatings' research analyst Leo Tratras said fund members had a promising start to 2013 before experiencing a slight drop last month due to the banking woes in Cyprus.

"January and February were quite strong but in March there was only a small fall of 0.2 per cent," he said.

"It shouldn't come as a surprise given how strong the first few months of the year were; despite that, the quarterly performance was still up over 4 per cent."

SuperRatings figures found the median balanced option rose by 2.6 per cent in January and a further 2 per cent in February before falling by 0.2 per cent last month.

But Mr Tratras said the March result was a good one compared to the sharemarket's 2.2 per cent fall.

"When you compare that fall in the wider Australian sharemarket to the relatively small drop in super funds it's quite a good performance.

"The bad news isn't as bad as it could have been."

A majority of Australians have their retirement savings invested in their fund's default option, which is usually the balanced investment option that has growth-style assets between 60 and 76 per cent.

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Fixed rates fall to all-time low

It pays to shop around for a home loan. Source: Supplied

FIXED interest rates have fallen to an all-time low - but most home loan customers are failing to take advantage.

Some financial institutions are offering three-year fixed rates below five per cent and experts believe they will not fall any lower.

By comparison, major lenders' standard variable rates are still averaging more than 5.7 per cent, even after the typical 0.7 per cent discount.

Yet the latest data from the Australian Bureau of Statistics shows only 12 per cent of customers who took out mortgages this year have fixed their loans, compared to more than 20 per cent who locked in a rate above 8 per cent in 2007 in the run-up to the global financial crisis.

Those currently on a variable interest rate are, in effect, betting it will not only fall lower than fixed offers - but that it will continue to fall.

For example, if in the next 18 months their variable rate was cut by 0.25 per cent three times to less than 5 per cent, there would still need to be three further cuts in the subsequent year and a half to make up for the additional interest costs incurred in the first 18 months.

This calculation does not take into fees. While some economists are forecasting further official rate cuts, HSBC economist Paul Bloxham said it was unlikely the Reserve Bank of Australia would reduce borrowing costs further  the cash rate has remained at 3 per cent since December.

"In our view we don't think the RBA is going to cut the cash rate any further so you would think it is not an unreasonable time to be considering potential fixing," he said.

"Fixed rates certainly look very competitive at the moment relative to history."

If the average discounted variable rate remained unchanged, a household which had $300,000 would pay nearly $8000 more in interest over three years than a family that fixed at 4.99 per cent. Again, this calculation does not take into account fees.

ABS figures showed after the GFC customers steered away from fixed loans with just 5 per cent of new customers locking in rates in both 2009 and 2010.

But in recent years the numbers have slightly increased, 8 per cent of customers locked in rates in 2011 while 13 per cent locked in their loans in 2012.

1300HomeLoan managing director John Kolenda said it's unlikely fixed rates will dip further and borrowers should pounce.

"I think we're very close to bottom of the cycle with fixed rates," he said.

"There's certainly been some great pricing out there by some of the majors on fixed rates for two or three terms, we've seen anything from 4.79 per cent to 4.99 per cent, they are at all-time record lows.

"So there's all indications we're near the bottom of the rate cycle for fixed rates."

Mortgage Choice spokeswoman Belinda Williamson said they had seen as easing of customers fixing loans in the first quarter of 2013 compared to the March quarter last year.

The average percentage of fixed rate loans over the March quarter was 20.78 per cent of new loan approvals, she said.

This compared to 22.67 per cent during the same period in 2012.Ms Williamson said many customers could be holding off on fixing their loans in the hope rates would fall further.

Canstar analyst Mitchell Watson said a lower interest rate could save a home loan customers thousands of dollars across the term of their loan.

"Depending on the size of your mortgage, a one per cent difference in interest rate can equate to several thousand dollars variation in interest costs per annum," he said.

"Variable interest loans tend to be more popular in Australia but those who are currently shopping for a new mortgage might do well to consider locking in."

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Is this video the ultimate Fiat ad?

A look at the Fiat ad which features hot models on a beach and Pitbull. Source: Supplied

FIAT has pulled out all the stops to be part of a new music video for a track that has already become known as 'the Fiat song'.

All the Sexy People, sung by Arianna with help from Pitbull, looks set to be another Fiat video hit with appearances from Charlie Sheen - his second stint for the brand - a beach full of dancers and a couple of mermaids who lose their tops.

The song itself has a retro flavour, and has previously been used for Fiat's 'Immigrant' ad, which saw the little 500 model emerging from the ocean onto US beaches - a stunt reprised in All the Sexy People with a Fiat 500 jetski.

A video takes us behind the scenes for the shoot on a Miami beach in Florida, with the expected crowd scenes of women dancing around in bikinis - and Charlie Sheen playing Charlie Sheen (or his former character from Two and a Half Men).

Arianna drives a Fiat underwater, a pod of Fiats skim the waves, Sheen circles two mermaids on his own private island and makes off with their tops, then turns up in a cryovac bed with a pair of lingerie models.

Following on from the steamy ads featuring supermodel Catrinel Menghia, this is becoming signature marketing for the Italian car brand.

See the behind-the-scenes Fiat video at Carsguide.

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Meet Barbara Walters the Playboy bunny

Footage from 1962 of NBC TODAY's Barbara Walters in a Playboy Bunny costume and taking a shift at the the famed New York City night club has been found as the iconic news hound announces her retirement. Courtesy NBC TODAY

IT'S 1962- The Twist is rocketing up the US charts, everyone smokes and female TV journalists are thin on the ground- enter a young Barbara Walters.

As the world remembers the serious interviews the trail-blazing TV journalist made her own in a career spanning five decades which is due to end next year, it's easy to forget how what TV news was like Walters began her career as a writer researcher on The Today Show in 1961. 

She quickly graduated to being a regular on camera Today girl, doing the weather and lighter reports which is when she briefly became a Playboy bunny.

In 1962, just two after Hugh Hefner opened the famous Playboy Club in Chicago, Walters suited up to learn the secrets of the new and mysterious creatures - Playboy bunnies-with some surprising results.

The soft news story sees Walters being fitted out in the now iconic tight bunny suit before she learns how to serve customers without spilling drinks or being constrained by the tight body suit the girls wear in a move dubbed the bunny dip.

A young Barbara Walters tries on her bunny suit.

While she admits that she "feels ridiculous" in the outfit she soon gets the other bunnies to show her their best moves as she learns their secrets.

Watching the light report today is a reminder of just how much TV journalism has changed during Walters' era as  the focus is on her serving skills, her sore feet and memorising the 35-page bunny manual.

"When my turn came I felt pretty awkward, but at least I didn't spill anything on the customers," Walters noted in her voice over.

The seedy side of dressing in skimpy outfits to let men ogle you while you bring them alcohol doesn't rate a mention.

Barbara Walters serves customers in as Playboy bunny suit.

A young Walters also seems genuinely unconcerned by the doorman's attempts to pick her up and when she tells him she's a reporter and not a real bunny, he says:"Gee, you could have fooled me"- a remark which she admits in her voice over actually pleased her.

The camera then cuts back to Walters and her co-anchor Hugh Downes whose eyes linger as he tells her: "You should be pleased. You make a very cute bunny."

The clearly uncomfortable studio banter continues as she raises her eyebrows while Downes offers up an impromptu editorial about how "it has been said that the atmosphere is depressingly moral in the Playboy Club as there is no hanky-panky whatever."

"The furore that is raised about it is ridiculous," he said. "I mean the criticism of is it ridiculous," he said before adding "but I enjoyed seeing you as a bunny" to a clearly uncomfortable Walters.

A clearly uncomfortable Barbara Walters listens as Hugh Downes editoralises about the Playboy Club.

The clip featured in the highlights package which aired as the veteran news reporter announced she would be disappearing from TV screen from next year but was proud to have been the first woman anchor on a network evening news program on ABC.

"I've had an amazing career - beyond anything I could have imagined," Walters said, "and I hope I have inspired some other women both in front of and behind the camera."

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ANZ irks business customers, says survey

ANZ ranks lowest in customer service among banks, according to a new study. Source: AAP

THE Commonwealth and Westpac rank highest for customer satisfaction among the big four banks, while ANZ and National Australia Banks are still languishing.

A monthly survey of satisfaction among the big four's business customers shows the Commonwealth and Westpac tied for first place with an average satisfaction rating of 7.4 out of 10.

By contrast NAB had an average satisfaction rating of 7.0, but ANZ ranked lowest with an average score of 6.9.

The monthly DBM Consultants' Business Financial Services Monitor (BFSM) shows the Commonwealth had the highest satisfaction rating for small, medium and large businesses and was tied with Westpac among micro businesses.

DBM Managing Director Dhruba Gupta said ANZ was still making up ground with business customers after a difficult 2012.

Satisfaction with ANZ dropped sharply after the bank shifted the timing if its monthly interest rate decision away from the Reserve Bank of Australia's board meeting.

Mr Gupta said the bank's recent pledge to lend $1 billion to start-up businesses over the next year may help to improve its standing.

"It will be interesting to see if ANZ's pledge will impact positively on its business customers' satisfaction levels," he said.

The BFSM is based on interviews with 20,000 businesses a year.

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