Superannuation funds are required to report and pay unclaimed super to the ATO twice a year.

Unclaimed super includes money transferred to the ATO by funds on behalf of individuals when they are one of:

• over 65 years of age, have not made any contributions for 2 years and have been uncontactable by their fund for 5 years.
• deceased and the fund has been unable to contact the rightful owner
• temporary residents whose visa expired and have left Australia more than 6 months ago
• a member’s spouse who is entitled to a portion of the member’s benefit as part of a divorce settlements, and the fund has been unable to contact the member’s spouse

From July 2010, lost super under the following criteria is also reported and paid to the ATO as unclaimed super:

• lost accounts with balances of less than $200
• lost accounts that have been inactive for 5 years where the fund has been unable to contact the member (ie. their contact details are no longer valid)

The ATO keeps track of unclaimed and lost super via the lost members register (LMR), which holds lost member records from all regulated super funds in Australia, other than self-managed super funds.

The LMR can be queried via the ATO’s SuperSeeker service. When SuperSeeker finds a match with the LMR, it will return the account details and contact details of the relevant super fund. Claim forms are available for any amounts that have already been paid to the ATO.

The SuperSeeker service can been accessed:

• Online via superseeker.super.ato.gov.au
• By phone 132865.
• By post by downloading this ATO form

Before consolidating your super fund accounts, some things to consider are:

• Fees may apply to withdraw and deposit funds. You should contact your fund to check what exit or withdrawal fees may apply before transferring money out. Also, the fund you are transferring to may charge entry or deposit fees.
• Benefits may exist on funds such as insurance entitlements for death, illness or accident. When transferring to a new fund you need to consider any terms and conditions such as waiting periods for insurance.
• Ensure your employer is paying contributions into your preferred fund as you will not be able to rollover or close the old fund until the super fund has confirmation that contributions have ceased.

If you have changed employers and potentially have multiple super funds but have lost track of which ones exist, you can use services such as ATO’s SuperSeeker to help find lost super. Refer to the Unclaimed Super article for more information.

If you have decided that offloading shares now to get hold of cash is more important that waiting for the right time, there is no investment decision to be made and as such the process of selling shares is straightforward.  So the main consideration would therefore be the cost of selling.  Online brokers offer the lowest fees and offer simple methods to get the process in motion.  E*Trade is one such service which has a visitor options so you don’t actually need to sign up to an account – just follow the instructions to email the appropriate details and before long the shares will be sold and payment made.  The ASX (Australian Stock Exchange) can be contacted to help you choose appropriate online brokers.  The broker will request the details quoted on the holding statement, which includes name, address, number of shares, company name and the shareholder reference number (SRN).  The SRN is required by the broker to perform transactions on your behalf.

If you are not sure on the investment benefits of selling now or holding the shares, you should seek advice from a full-service broker who will establish your circumstances to help you make the appropriate decision.  These brokers can charge fees either on a percentage basis or annual fee depending on the level of service required.  Once again the ASX is a good source of information for brokers.

Alternatively, this may be a good opportunity to learn the ropes by watching the market to take note of share changes.  After observing the market you may get a better feel for any share cycles to help predict the top and bottom points of the cycle.

One more consideration is taxation.  Capital gains tax (CGT) may be payable on the profits from selling your shares.  Usually the price of the shares at the time you obtained them will be the CGT cost base for calculating the profit.  For inheritance this would be based on the deceased’s date of death.  With company share schemes, the price will be stated on the original advice. You should seek advice from a taxation professional if you believe CGT may be payable.

For more information, the ASX offers free online courses to help you get started.

Asset Classes

The four main asset classes are:

• Cash (e.g. bank accounts)
• Fixed interest (e.g. government bonds, corporate bonds)
• Property (e.g. residential, commercial, industrial)
• Shares (e.g. Australian & International shares)

Asset classes can broadly be separated into ‘defensive’ and ‘growth’ investments:

Defensive investments (cash and fixed interest) provide regular income and do not usually grow in capital value. Investment returns and values fluctuate only slightly over short periods. Over the medium to long-term, returns are generally lower than those of growth investments.

Growth investments (property and shares) can provide growth in the value of your capital in addition to income. Investment returns can fluctuate significantly over short periods although over the medium to longterm, returns are potentially higher than those of defensive investments.

Risk and Return

Both defensive and growth investments have a different expected rate of return, and normally, the higher the expected return, the higher the associated risk.

All investments carry some risk. There are broadly three types of risk to consider:

• The likelihood of not getting the expected return on the investment you are considering – including the possibility of losing some or all of your investment
• The risk of volatility – where the value of some investments and their potential return may rise or fall from time to time due to market fluctuations
• The risk of being too cautious – if your money earns less than inflation then it loses its real purchasing power

These risks can generally be managed by assessing the investment you are considering and your own long-term financial situation and objectives.

Normally, the more aggressively you invest, the more likely it is that you will achieve higher long term returns, but you also run the risk of short-term setbacks, as occurred in 2008-2009.

Diversification

By not investing all your funds into the one investment, or even the one asset class, you can significantly reduce the level of fluctuations in your investment value; ie. “not putting all of your eggs in the one basket”. This type of investment approach is known as diversification.

Diversification is not simply throwing your money around haphazardly into as many different investments as you can. It is about selecting investments that complement each other and perform well at different times of the economic cycle.

Knowing how much to invest in each asset class will depend on your personal circumstances, objectives, investment time frame and risk profile.

A Financial Adviser can provide personal advice and help select an appropriate investment portfolio for you.

With financial products, it is important to compare your current circumstance with the potential savings by adopting a new product. Websites such as “betterbanking.choice.com.au” provide comparison guides on various products such as home loans, savings accounts and credit cards.

To avoid scams, regularly visit the ACCC website Scam Watch to become familiar with the latest scams and to ensure the latest great deal is not a hoax. Furthermore, a quick google search for the product combined with keywords such as hoax, scam or rip-off may help

Here are some tax tips and thresholds to help improve your taxation planning for 2011/12 financial year:

• You can claim 50% of eligible education expenses for dependants with up to $397 for primary school and $794 for secondary education
• Work related expenses up to $300 do not require a receipt
• If you do not hold private health insurance, the extra 1% medicare levy surcharge kicks in at $77000 for individuals and $154000 for households
• Tax agent fees are 100% tax deductible and while you can do your own tax for free, tax agents will often find those extra deductions and rebates you often overlook
• As an employee you cannot claim travel expenses from home to work, however, if you hold a second job you can claim the travel between the two workplaces
• There are tax benefits when borrowing for investing with tax deductions on losses, eg. buying a property to rent.  If you hold the asset for 12 months, the capital gains tax reduces by 50%
• Voluntary superannation contributions will be matched by the government up to $1000 up to set income caps.  While these income caps have not increased for the 2012 financial year, anyone who earns between $31920 and $61920 still gains benefits from this scheme
• If your spouse earns under $13800 per year you can get a rebate of $540 for contributing $3000 to their superannuation fund
• HECS debt benefits have been reduced for 2012 with upfront payment discounts reducing from 20% down to 10% and voluntary payments on accumilated debt reducing from 10% down to 5%.  Given the debt is tied into your income level and inflation rates, it is better to invest the money rather than make upfront or additional payments
• The baby bonus and the paid parental scheme are income capped at $150001 for households