psionl0
Skeptical about skeptics
Australian retirees to become the richest in the World
- Thread starter lionking
- Start date
Anyway, no matter what you call superannuation, literally nobody is calling for abolition or even a cut in superannuation. As I said in the OP, Australia has safely dodged the economic timebomb waiting for other nations as populations age and rely on social security.
Last edited:
:max_bytes(150000):strip_icc()/superannuation.asp-final-ae408ef0c0394e71b6b948007e85b9ce.jpg)
Understanding Superannuation: Definition, Mechanism, and Plan Types
Discover how Australian superannuation plans work, the differences between defined-benefit and accumulation funds, and their benefits for a secure retirement.
Doesn't really seem all that different from other schemes except that its adequately funded and appears to invest the money in markets.
Funding is basically identical to how the US funds SS. The government mandates that the employer spend on a retirement plan and it appears some of the money is taken before the employee is paid and some is taken out of the employee's paycheck.
It looks like there are two types of plans, defined benefit, basically like old school pensions in the US. I expect those will become less stable over time but will see. And defined contribution, which is basically like a 401k in the US.
This all assumes I've understood things correctly, which is not 100% guaranteed. All that being said, its basically what GW Bush proposed when he was president. The Dems and the American left would never support what amounts to privatizing SS. The GOP has basically just given up on any effort to keep SS from going belly up too.
What you haven’t mentioned is that each superannuation account is individualised. Each employee can decide the risk level of investments and can choose to contribute more from their paycheck (and get a tax deduction as well). They can then decide when to access superannuation and how much. Pretty much as far from a tax as can be imagined, but never mind that.Understanding Superannuation: Definition, Mechanism, and Plan Types
Discover how Australian superannuation plans work, the differences between defined-benefit and accumulation funds, and their benefits for a secure retirement.www.investopedia.com
Doesn't really seem all that different from other schemes except that its adequately funded and appears to invest the money in markets.
Funding is basically identical to how the US funds SS. The government mandates that the employer spend on a retirement plan and it appears some of the money is taken before the employee is paid and some is taken out of the employee's paycheck.
It looks like there are two types of plans, defined benefit, basically like old school pensions in the US. I expect those will become less stable over time but will see. And defined contribution, which is basically like a 401k in the US.
This all assumes I've understood things correctly, which is not 100% guaranteed. All that being said, its basically what GW Bush proposed when he was president. The Dems and the American left would never support what amounts to privatizing SS. The GOP has basically just given up on any effort to keep SS from going belly up too.
The other thing is that, because superannuation did not become a universal program until the 1980s, some people (like me) don’t have a 7 figure fund, but are able to draw a full or part pension.
Its future retirees who will have enough to fully fund their retirements, leading to massive government savings.
Norman Alexander
Penultimate Amazing
In practice, our super goes through two distinct phases.
First, contributions while you work. There are plenty of ways this is done. But super contributions are a pre-tax component of your remuneration. So some benefits there.
Second, when you retire. You no longer make contributions and your fund "rolls over" or converts to a payment scheme. Again, plenty of ways to be paid out, but the usual is a regular payment which is tax free. Meanwhile, your fund continues to be managed by the investment operator, so it earns income. If that income exceeds your payouts, you have payouts for life plus a lump sum to pass on as inheritance.
We understand this is similar to a lot of other super schemes elsewhere, particularly the US 401(k) scheme.
First, contributions while you work. There are plenty of ways this is done. But super contributions are a pre-tax component of your remuneration. So some benefits there.
Second, when you retire. You no longer make contributions and your fund "rolls over" or converts to a payment scheme. Again, plenty of ways to be paid out, but the usual is a regular payment which is tax free. Meanwhile, your fund continues to be managed by the investment operator, so it earns income. If that income exceeds your payouts, you have payouts for life plus a lump sum to pass on as inheritance.
We understand this is similar to a lot of other super schemes elsewhere, particularly the US 401(k) scheme.
That is very similar to the US 401K except we typically don't get much choice. Employers choose some manager to manage the funds, the most I've gotten to choose is from a selection of mutual funds and money market funds from the managers portfolio. Its generally pre-tax from the paycheck up to I think 10% of earnings and the employer typically provides matching up to I think 10% of the employees base salary but it might be lower. Not mandatory but there are tax incentives.
theprestige
Penultimate Amazing
I'm not ignoring you; I've already addressed your argument. Mainly, I think your definition of a tax is too narrow in this context. lionking is obviously appealing to that narrower definition, but I don't see the point. What exactly are we supposed to infer from that claim? That it's a voluntary scheme set up by the employers of their own free will, as a way to attract and retain employees? No, it's not. It's a government-mandated cost that employers must pay, to fund a government-mandated retirement scheme.
In those aspects, it functions very much like a tax, and I think those aspects are the ones that matter, in the context of lionking's claim.
Please let me know of a tax where the general public, after a certain age, can decide exactly when to access it, how much to access and exactly what to do with it ?
theprestige
Penultimate Amazing
UHC.
Lots of government-mandated programs are opt-in for the people benefiting from those programs. That doesn't change the fact that the government is still forcing someone to pay for those programs. In the case of this program, it's employers that are forced to pay.
Last edited:
Norman Alexander
Penultimate Amazing
Doesn't make it a tax. Any more than making employers pay employees a tax.
theprestige
Penultimate Amazing
The two things are not analogous.
It's certainly very tax like. But instead of taking the money and spending it as the government sees fit they just mandate that employers spend the money as the government sees fit.
If the government says you have spend 1% of your income on some fund for local parks that's operated by some third party. I guess that's not a tax but it functions like one.
If the government says you have spend 1% of your income on some fund for local parks that's operated by some third party. I guess that's not a tax but it functions like one.
MostlyHarmless
Critical Thinker
- Joined
- Apr 1, 2004
- Messages
- 264
I don't know. The government makes me pay liability insurance on my car. I've never had an accident. Is that a tax? I mean it is for the common good, but so are the supers apparently.
Tax like.
arthwollipot
Observer of Phenomena, Pronouns: he/him
I don't know why there is so much vehement insistence that it is a tax.
psionl0
Skeptical about skeptics
You never did. You replied to other posts but not mine. You haven't explained why it matters whether you call it a tax or not.
MostlyHarmless
Critical Thinker
- Joined
- Apr 1, 2004
- Messages
- 264
Are you trying to tell me there is a UHC system where people can use UHC health services without any limitations at all? Because I don’t believe they exist.
In any case, providing services (which UHCs do) is hardly a tax.
Norman Alexander
Penultimate Amazing
Super is part of my employment remuneration, not a fee or deduction by the government. It's a before-tax component. My employer's payroll section deducts it from my regular pay and deposits it in my designated super fund. Is this too complicated?
Before it was made mandatory by government (and my working career and super contributions started 20 years before that), many employees such as I made this arrangement of their own accord with employers. Was it a tax then?
After it was made mandatory, no change in financial arrangements or process for either employers or employees, how does it magically become a tax?
Yeah, I dunno either. Seems pathological.