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Superannuation law. (1 Viewer)
- Thread starter RIZAL
- Start date
You can have your superannuation paid out to whoever you want, you just need to nominate your beneficiary. If such a contract was entered into, the beneficiary would have to be changed, or the contract would be breached when the superannuation vested. If you are still listed as the beneficiary, superannuation providers will not pay your entitlement out to anyone else with anything short of a court order, and whether or not a court would be willing to make a decree of specific performance in such a case is doubtful.
In short: I don't see why such an arrangement would be illegal. The Family Court has something similar called 'flagging orders' which are used to split super, but not have the entitlement paid until it vests. However, unless the correct arrangements have been made, enforcement could be impossible/costly, and/or result in large damage orders being made against you.
Also, what Frigid said.
Edit: Any question of illegality could easily be solved by employing a legal fiction, whereby you keep your superannuation entitlement, but pay the other person a certain amount "out of your own pocket". Obviously, you are reimbursed when your super vests, and the other party would still recieve their money.
All of the above arrangements would only be effective if you have a super fund which allows you access to the full measure of funds as soon as it vests.
In short: I don't see why such an arrangement would be illegal. The Family Court has something similar called 'flagging orders' which are used to split super, but not have the entitlement paid until it vests. However, unless the correct arrangements have been made, enforcement could be impossible/costly, and/or result in large damage orders being made against you.
Also, what Frigid said.
Edit: Any question of illegality could easily be solved by employing a legal fiction, whereby you keep your superannuation entitlement, but pay the other person a certain amount "out of your own pocket". Obviously, you are reimbursed when your super vests, and the other party would still recieve their money.
All of the above arrangements would only be effective if you have a super fund which allows you access to the full measure of funds as soon as it vests.
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If the person was to die before the super vested, and didn't account for the creditor in their will or as a beneficiary under the account, then the creditor stands to lose their investment (in the case of an unsecured loan). In the case of a mortgage, then the entitlement will be taken out of the estate instead - but the pre-vesting value of the super (or the death benefit) may not be enough to cover the loan, nullifying the estate and causing both the beneficiaries and the creditor to lose money.
There's probably a whole load of other reasons it's a bad idea, but that's the first one that comes to mind. It's too risky for the lender.
There's probably a whole load of other reasons it's a bad idea, but that's the first one that comes to mind. It's too risky for the lender.
look, to answer RIZAL's question in a simple, non-legal fashion.
the fact that there are superannuation laws and minimum contributions means that it is parliament's intent that there be such; because, inter alia, it lessens the government's burden of caring for retirees.
now, suppose you have a legal loophole that allows you to temporarily do whatever the hell it is you want to do.
if i were parliament, i would simply pass an amendment to the superannuation laws, with clear retrospective effect, that all such contracts that attempt to take advantage of the loophole is null, void and unenforceable.
ergo, your idea fails.
the fact that there are superannuation laws and minimum contributions means that it is parliament's intent that there be such; because, inter alia, it lessens the government's burden of caring for retirees.
now, suppose you have a legal loophole that allows you to temporarily do whatever the hell it is you want to do.
if i were parliament, i would simply pass an amendment to the superannuation laws, with clear retrospective effect, that all such contracts that attempt to take advantage of the loophole is null, void and unenforceable.
ergo, your idea fails.
jackmurray1989
Mr Mature
People have been trying to play the superannuation market for years. If there were any loop holes they've been found and plugged up long ago.
Too much risk for a financial institution to bother with this.
a) who guarantees that your superannuation level will reach a given level in 45 years?
b) even if a bank was willing to take that punt, their interest rate used in the discounted value would be so ridiculous as to make the whole episode worthless. ie: they won't use LIBOR.
Not sure if its illegal or not, but it sure is impractical.
a) who guarantees that your superannuation level will reach a given level in 45 years?
b) even if a bank was willing to take that punt, their interest rate used in the discounted value would be so ridiculous as to make the whole episode worthless. ie: they won't use LIBOR.
Not sure if its illegal or not, but it sure is impractical.
BillytheFIsh
Member
There once was a man who had ideas very similar to your's. You can read about him here:
http://www.asic.gov.au/asic/asic.ns...+of+super+rollover+scheme+jailed?openDocument
I'm sure there are many other such examples.
http://www.asic.gov.au/asic/asic.ns...+of+super+rollover+scheme+jailed?openDocument
I'm sure there are many other such examples.
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subdued123
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Frigid, must you use that word? It makes me sad, because it reminds me of the Architect in the Matrix series.Frigid said:
MichaelJackson2
Moonwalker
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the asian kung-fu master that guarded the oracle had bad english - could not understand a word of what he was saying when he was explaining the keys and locks in that never-ending hall. the most mind-wanking quote (architect): "concordantly whilst your first question may seem to be the most important, you may or may not realise that it is almost the most irrelevant". almost as ridiculous as "and now they shall feel the full force of... da dark siiiide!" Vader: "where is padmae? how is she?" Emperor: "well it seems that in the heat of your anger, you killed her". Vader: "NOOOOOOOOOOOOOOOOO".
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