De-coding Murray Report Example

As we mention the Murray Report is of course "coded" in order to fulfill its role of creating the illusion of activity and concern by the Govt but at the same time not actually CONCLUDING anything that could come back to bite them at election time.

So the closest the Report gets to an example to explain the "Weasel Words" [as Don Watson calls them] is this graph which shows how 3 different CIPRs [please read the Report if you really want to know what this particular Weasel Word might mean] might work by comparison to the strategy used by "most Pensioners" [on the advice of BigSuper] to simply use the Minimum Drawdown of an Account Based Pension [formerly Allocated Pension].

The first thing to note is the Freudian Slip via "excludes Age Pension".  That comment simply reiterates the message that the Terms of Reference of the Report excludes any reference in the Report to Age Pension [which of course makes the whole Report worthless].  So what this meant to say was "the income streams shown do not include any Age Pension to which the Pensioner may also be entitled to".

The SLIP is that the [unspoken] truth is that the Govt WANTS to exclude Pensioners from the Age Pension once they reach the 85 year mark in the graph above, but unless they change the legislation [by another "grandfather trick"?] the Pensioner would get the $25,000 pa shown above as well as about $22,000 pa in Age Pension.  So it is very convenient for Mr Murray that he does not need to inform us of this fact.

To very briefly explain the strategy being touted above, Justin [as we shall call him] has $400,000 in Super at age 65 and the Govt wants him to put aside $100,000 or so of that into an "insurance fund" in case he lives past 85.  Then he fully exhausts the remaining $300,000 by age 85, hence the income stream lines above simply continue on at the same "smooth" level to age 100.

Of course the Report tells us nothing of Justin's details except he is a male of 65 and has $400,000 in Super, so we will assume some facts [eg Justin is a homeowner and his Fund returns 8% pa].  We then do two examples, one similar to the "dotted line" one above for Min Drawdown and one exhausting his Super at age 85 [ALL of it, ie no insurance policy].

But here we differ dramatically from the Murray Report method [same as BigSuper] in that our LOPS shows EVERYTHING, including Age Pension, and if you avail yourself of our service, our Report to you will be based on your EXACT circumstances.

LOPS is of course a satirical jab at the Govt propensity for acronyms in their Weasel Words [eg the latest one of CIPRs] and simply stands for Little Ozzie Pensioner System [ie for the Little Ozzie Battler, that classic Australian entity].

In the top figure Justin is taking the advice of his BigSuper adviser and Drawing down the minimum amount and as you can see is living frugally on just $20,000 pa to start, the very time when his health still allows him to do the Grey Nomad tour around Australia, but alas he is short on funds.  If he lives to 95 he will be getting $70,000 but that will be of no use in a nursing home.

In the lower figure Justin takes Our Advice [using the LOPS at ozpensions.info] and will get DOUBLE that at $40,653 [the amount the LOPS calculated to exhaust his Super at age 85], so he can now afford to take as many trips as he wants till the wheels fall off his caravan or himself.

And because the Fund Fees are based on the account balance, he saves $37,017 on fees over the 20 years.

But you are already thinking that his large Drawdown of $40,000 pa must surely reduce his Age Pension and prior to 1 Jan 2015 you might be right, but Justin comes AFTER the evil curse of Grandfathering.

A comparison of the two "C. Testing for Aged Pension" figures above shows that it is Justin's Assets [ie NOT his deemed income] that determines his level of Age Pension and simply by gradually EXHAUSTING the capital he goes from 35.37% to 80.14% over 20 years, an increase of $206,657.

Then if we compare the two "D. Combined Income Stream" graphs we see Justin has gone from a 20 year income with an average of about $40,000 pa to one of about $60,000 pa, a total increase of $413,755.  His Year #1 income is a tax free $53,134 and the LOPS tells Justin that that is equivalent to a taxable income of $63,193.

But you say that IF he lives past 85 he will be back to just the Age Pension.  That is so but if you refer back to the brand new "solution" by the Govt at the top of the page, that was ALL he was going to get past 85 ["excluding" any Age Pension, however you may wish to interpret that Freudian Slip].

Finally it would be "intellectually dishonest" not to look at the Grandfathering situation, so here it is:

The result is that Justin would be worse off by $72,163 over 20 years if he had started his retirement prior to 1 Jan 2015 and remained convinced by BigSuper that he should REMAIN with Grandfather Rules [rather than sweep his product for a new one].

So we see yet another example to demonstrate just WHY the "Grandfather Amendments" were introduced in such a clandestine manner, and then "spun" by BigSuper as "Grandfather is GOOD, New Rule is BAD".

Ongoing Personal Security Update

It is some 10 weeks since I tabled my Ministerial with Canberra about the Grandfather Fraud and things are happening, though "unofficially".

Obviously the Abbott Goons do not have the sway with Google they may have expected to delete my posts, so I will continue to use Blogger to secure my safety.

The first "strange happening" was that I had a new customer who was a little old lady who was being screwed by Big Super and was much in need of help.

Our Report to her "went astray" and then the little old lady herself "went astray".  Now given her stated state of "very tired" having to keep working at 67, it may be possible she is in hospital or died, BUT when that is coupled with an Australia Post item neither reaching its target in 2 weeks or being returned to sender, we are looking at a serious situation.

The second "strange happening", right on top of the Abbott announcement of using the excuse of "kiddie porn" to cause our ISP to "rat on us", I GOT one of these attempts to "do a Rolf Harris" on me.

The person who contacted me "out of the blue" was Randy, a "damaged by Family Court" man who fled America to live in the Philippines in 2001.  I was presented with a purported "travel site" [which the Abbott Goons know is of interest to me] but it simply loaded a swag of what the Goons call "kiddie porn" onto my computer.

Here is the site and you can see that Randy is very fond of young Filipino kids, but that does not make him a pedophile in a "normal society" like the Philippines where Randy is doing one hell of a lot of good for these poor folk from his meager Pension.

But as we know, in an Australian or American trumped up "court situation", simply having these photos on your computer is enough to have you put away for life.

SO I deleted all reference to Randy from my computer, meaning I now await the next attack by the Abbott Goons.