28th January 2003

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28th January 2003 Powered By Docstoc
					Money Mentors
Spring Hill Level 3, 490 Upper Edward St, Spring Hill Q. 4000 PO Box 1229, Spring Hill, Q. 4004 Telephone (07) 3839 1130 Facsimile (07) 3839 2008 www.moneymentors.com.au

Issue 1 – August 2004

Welcome to your Money Mentors update
Investment Spotlight Macquarie Fortress Fund A Limited Opportunity To Earn 11%+^ Returns Per Annum An opportunity has arisen to invest in the Macquarie Fortress Fund. This fund aims to provide investors with high, regular income whilst maintaining capital stability. With forecast income in excess of 11% p.a.^, Fortress will have an exposure to a diversified, actively managed portfolio of US senior secured loans – a unique opportunity for Australian retail investors to access this asset class. Key Features  First year forecast return of 11.2%^ for the first full year after the initial investment period.  Exposure to a diversified, actively managed portfolio of US senior secured loans – monitored closely by an experienced team of professionals.  Income distributed quarterly to provide you with a regular income stream.  Quarterly redemptions currently without exit fees (subject to restrictions set out in the PDS).  Historically low correlation to equities and fixed interest. For more information on the Fortress Fund please refer to the attachment “Macquarie Fortress Flyer”. Please contact us for a Product Disclosure Statement and Application. We will express post the documentation upon request.

Money Mentors have secured a limited allocation in this Fund. Be quick, applications closing 24 September 2004.
^Macquarie Financial Products Management Limited (“MFPML”) is forecasting an annualised yield of 11.2% for the first year after the end of an initial investment period, which ends on 31 January 2005. MFPML has calculated the forecast returns for an investment in the Macquarie Fortress Fund based on assumptions set out in the PDS. However, while MFPML believes it has reasonable grounds for these forecasts, they are predictive in nature and may be affected by inaccurate assumptions, risk or other uncertainties. Investors should be aware that these forecasts may differ materially from the returns ultimately achieved.

Source: Macquarie Group

SECURITOR
Gary Miller and John Petralia are Authorised Representatives of

SECURITOR Financial Group Ltd
ABN 48 009 189 495 Australian Financial Services Licensee 240687 Level 21, Central Plaza One, 345 Queen St Brisbane, Q 4000

Money Mentors
Spring Hill Level 3, 490 Upper Edward St, Spring Hill Q. 4000 PO Box 1229, Spring Hill, Q. 4004 Telephone (07) 3839 1130 Facsimile (07) 3839 2008 www.moneymentors.com.au

News Articles Do you currently receive or would like to receive an age pension? 20 September 2004 Deadline may affect you! Choosing a retirement income stream now could make a difference The Government has proposed to reduce the current 100 per cent assets test exemption for new complying income streams to a 50 per cent exemption from 20 September 2004. For people looking at purchasing a retirement income stream, a change in the assets test exemption for complying income streams could make a big difference to the amount of Age Pension they will be entitled to receive. The following case study illustrates how choosing to purchase an income stream sooner (before 20 September 2004) rather than later, could effect the Age Pension entitlement. The assets exemption test available now could give Judy 56 per cent more retirement income – a difference of $7,800 per year – than if she is assessed under the changes proposed to apply from 20 September 2004. Example: Income streams in retirement – before and after 20 September 2004. Judy is 63 years old and is looking forward to retiring from the workforce. She is considering purchasing a retirement income stream to fund her retirement plans. Judy owns her home and has the following assets:  $25,000 in lifestyle assts (car and household contents)  $200,000 in a superannuation fund (comprising of only pre-July ’83 & postJune ’83 components)  $100,000 share in a rental property (produces income of $2,000 p.a. net) and  $35,000 in various bank accounts and term deposits. Judy’s retirement income stream options – complying & allocated – are shown in the table below. If the complying income stream is purchased after 20 September 2004 the addition of 50 per cent of the value of the complying income stream will impact Judy’s assessable assets and her Age Pension entitlements. Allocated Pensions receive no exemption from assets testing and will not be affected by the proposed legislation.

SECURITOR
Gary Miller and John Petralia are Authorised Representatives of

SECURITOR Financial Group Ltd
ABN 48 009 189 495 Australian Financial Services Licensee 240687 Level 21, Central Plaza One, 345 Queen St Brisbane, Q 4000

Money Mentors
Spring Hill Level 3, 490 Upper Edward St, Spring Hill Q. 4000 PO Box 1229, Spring Hill, Q. 4004 Telephone (07) 3839 1130 Facsimile (07) 3839 2008 www.moneymentors.com.au

Lifestyle assets (car & household contents) Bank account & term deposits Investment property Superannuation/income stream

Before 20 September 2004 Purchase Purchase $200,000 $200,000 complying allocated income pension stream $25,000 $25,000 $35,000 $100,000 $0 (100% asset test exemption) $160,000 $11,401 p.a. $11,880 p.a. $11,401 p.a.
$10,205 p.a.**

After 20 September 2004 Purchase Purchase $200,000 $200,000 complying allocated income pension stream $25,000 $25,000 $35,000 $100,000 $100,000 (50% asset test exemption) $260,000 $3,601 p.a. $11,880 p.a. $3,601 p.a.
$10,205 p.a.**

$35,000 $100,000 $200,000

$35,000 $100,000 $200,000

Total assets Asset test entitlement Income test entitlement Annual Centrelink pension payable* Income stream payable Total gross pension income (Centrelink payments & income stream)

$360,000 nil n/a nil $12,048 p.a. $12,048 p.a.

$360,000 nil n/a nil $12,048 p.a. $12,048 p.a.

$21,606 p.a.

$13,806 p.a.

* The means test which entitles the recipient to the least benefit is the test which will be applied. ** The amount of the complying income stream is based on a quote, which was obtained for illustrative purposes only.

Source: AXA

SECURITOR
Gary Miller and John Petralia are Authorised Representatives of

SECURITOR Financial Group Ltd
ABN 48 009 189 495 Australian Financial Services Licensee 240687 Level 21, Central Plaza One, 345 Queen St Brisbane, Q 4000

Money Mentors
Spring Hill Level 3, 490 Upper Edward St, Spring Hill Q. 4000 PO Box 1229, Spring Hill, Q. 4004 Telephone (07) 3839 1130 Facsimile (07) 3839 2008 www.moneymentors.com.au

National Australia Bank As you are undoubtedly aware, National Australia Bank (NAB) has been the subject of much recent media coverage in light of its earnings downgrade. As a result of this Investors Mutual has prepared an article that summarises their position on NAB, and their strategy for the stock in their large cap portfolios. Paul Frost, Senior Portfolio Manager recently met with NAB senior management following their latest earnings downgrade. You can view the article by clicking on the following link: http://www.iml.com.au/news

We hope you find the content useful in understanding the issues facing National Australia Bank.

Source: Investors Mutual Limited

SECURITOR
Gary Miller and John Petralia are Authorised Representatives of

SECURITOR Financial Group Ltd
ABN 48 009 189 495 Australian Financial Services Licensee 240687 Level 21, Central Plaza One, 345 Queen St Brisbane, Q 4000

Money Mentors
Spring Hill Level 3, 490 Upper Edward St, Spring Hill Q. 4000 PO Box 1229, Spring Hill, Q. 4004 Telephone (07) 3839 1130 Facsimile (07) 3839 2008 www.moneymentors.com.au

Tax office backflip on recontribution strategies TAX-EFFECTIVE super "recontribution" strategies received the green light from the Australian Taxation Office this week, leaving the door open for higher tax-free pensions in retirement. The decision represents a backflip on the ATO's previous comments, but ATO commissioner Michael Carmody has warned that "contrived" arrangements will be treated as tax avoidance. Financial advisers commonly use a recontribution strategy once super fund members are allowed to access their superannuation, generally after age 55. The idea is to withdraw super payments, in particular the post-1983 portion, up to a lump-sum taxfree threshold of $123,808, then recontribute it as an undeducted (after-tax) contribution. Once the pension begins to be paid, there's no tax payable on the undeducted portion, while a 15 per cent tax rebate applies on the rest. "We have examined a number of straightforward strategies and confirm that they will not attract the general anti-avoidance provisions," Carmody says. "We would of course need to consider our position were we to find examples of arrangements contrived to meet eligibility requirements in form but not in substance." In May deputy tax commissioner Mark Jackson warned that where recontributions were being used purely to derive a tax advantage, they would be treated by the ATO as tax avoidance. After an industry outcry, recontributions were referred to an ATO committee to develop a formal opinion that could be used to establish what was acceptable and what wasn't. "There was anecdotal evidence that people were using multiple recontribution strategies to reap a tax benefit again and again, or using promissory notes so that the money never actually left the super fund," CPA Australia superannuation adviser Michael Davison says. "Now, where superannuation money legitimately leaves the fund once and goes back into the same or another super fund, that's OK, but anything else will probably attract ATO attention." Peter Burgess, Tower Trust superannuation services manager, says the ATO guidance is "very significant". "Every financial adviser I have spoken to has used the recontributions strategy at least once," he says. "The upshot now is that the strategy can continue to be used, but multiple recontribution strategies will be considered tax avoidance."

SECURITOR
Gary Miller and John Petralia are Authorised Representatives of

SECURITOR Financial Group Ltd
ABN 48 009 189 495 Australian Financial Services Licensee 240687 Level 21, Central Plaza One, 345 Queen St Brisbane, Q 4000

Money Mentors
Spring Hill Level 3, 490 Upper Edward St, Spring Hill Q. 4000 PO Box 1229, Spring Hill, Q. 4004 Telephone (07) 3839 1130 Facsimile (07) 3839 2008 www.moneymentors.com.au

Tax office backflip on recontribution strategies continues Carmody says there is "a certain amount of flexibility and choice about when and how people draw on their super savings". He says recontribution strategies that will not attract anti-avoidance provisions include where: A person withdraws an eligible termination payment (ETP) from their super fund and then recontributes the same or a similar amount shortly afterwards to the same fund for the purpose of starting a pension. Variations to the first scenario such as where the recontribution is made to a fund other than the one that paid the ETP (for example, a spouse fund). "Again, the effect is to reduce the assessable portion of the annual pension," he says. A person makes a large undeducted (after-tax) contribution to their super fund before they receive an ETP that reduces the amount of tax payable on the ETP. The tax office will release a ruling on recontribution in the next few months. Source: The Australian – 7 August 2004

Please note the above does not constitute specific advice and is intended to provide general information only. Feel free to contact the team at Money Mentors on 07 3839 1130 for further information. We look forward to your call.

SECURITOR
Gary Miller and John Petralia are Authorised Representatives of

SECURITOR Financial Group Ltd
ABN 48 009 189 495 Australian Financial Services Licensee 240687 Level 21, Central Plaza One, 345 Queen St Brisbane, Q 4000


				
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