Letters: When to hold or fold? QSuper

When to hold or fold?

I have Blackmores (BKL), Flight Centre (FLT) and Carsales (CRZ) which have traded up quite well. I have halved all, and received dividends. Note first two have better dividends probable at next half. Are they overpriced? Is it better to sell or wait for extra franking and dividend? What is Robert Gottliebsen’s pick for these?

R Peebles

QSuper

I was wondering if could advise whether there is information on ‘Save Our Super’ website that can assist with my superannuation situation? Being a Queensland government employee, I am stuck with QSuper, in a ‘defined benefit’ plan or an ‘accumulation’ account.

I have maintained my ‘defined benefit’ plan status, despite an advertising campaign in about 2003 regarding the benefits of the ‘accumulation’ account. Apparently the Queensland government is to honour its defined benefit super funds; however, I suspect that will not be achieved when the government runs out of money and invokes the tax ruling that says, "we can change the amount we pay out", which will naturally occur the day before I retire or shortly thereafter.

I have 15 years before I reach 60 years of age. It is not likely that I will find suitable employment outside my current government job that pays as well (~$98,000 gross for 11-12FY).

However, I don’t for one minute have any expectations that QSuper will lead me to retirement luxury and I do not contribute any additional funds to my superannuation, beyond compulsory contributions, because any extra just goes into an associated ‘accumulation’ account that is subject to the fear and greed of the share market and QSuper’s ‘play-it-safe match the All Ords/ASX200/[insert other metric here]’ investing strategy.

I am very much interested in establishing a SMSF to invest in residential property, mostly, but appear to be hobbled by the QSuper death grip on my superannuation funds (~$330K at this time), have you any or can you point me in the direction of any information as to how I can go about obtaining an exception to the requirement to contribute to QSuper and only QSuper, in light of the ‘choice of funds’ super legislation?

I do believe that I can leverage my super funds into property better than QSuper can through the share market (but there is still the problem of having to sell the asset to realise any capital gain, as opposed to borrowing equity against the asset).

I see the below Eureka Report talks about super being lucrative, provided it is sorted out in time and the right strategies applied. Do you have a report that can assist my above-described situation.

MB

Editor’s response: There are, perhaps unfortunately, a few gaps in the total choice of superannuation fund legislation introduced in 2005 and this may well be one of them. However you may be one of the lucky ones holding onto a defined benefit plan, something Eureka has long campaigned for more of as discussed at length in this 2009 article from Alan Kohler (click here).