Answers by Paul Rickard

With the transfer balance cap increasing, can I start another super pension? Which banks pay fully franked dividends and which are only partly franked? Do the brokers feel that MediBank Private is fully priced? What is the ASX Code for the biggest IPO this year, GemLife Communities?

Question 1: I read your article on Monday about the transfer balance cap, which governs the amount of money you can transfer into the retirement phase of super, increasing to $2,000,000 on 1 July. I started a super pension a few years’ back, but have since been doing consulting work and have added some monies to my super account. Can I now start another pension?

Answer: You can start another pension if you have spare capacity under your transfer balance cap. The main attraction of starting another pension is that the investment earnings on those super monies in the pension phase will be taxed at 0%, rather than the current 15%. The major downside is that you will need to take out each year at least the minimum pension withdrawal.

To check whether you have room under the transfer balance cap (TBC), you should be able to view your revised TBC on mygov. After logging on to mygov, transfer to the Australian Taxation Office. Click on super, then information, then transfer balance cap.

Question 2: Can you confirm which of the banks pay fully franked dividends, and which are only partly franked or unfranked?

Answer: Commonwealth Bank, Westpac, National Australia, Bank of Queensland and Bendigo and Adelaide Bank pay fully franked dividends.

ANZ and Macquarie are only partly franked. ANZ is currently 70%, Macquarie is at 35%.

Question 3: Medibank Private (MPL) seems to be going really strongly. Do the brokers feel it is fully priced?

Answer: According to FN Arena, the major brokers don’t see a lot of upside. Their consensus target price is $4.91, approximately 3.0% lower than the last ASX price of $5.06. There is some divergence, with Macquarie having a target of $4.25, while Morgan Stanley raised its target this week to $5.57. Morgan Stanley says that hospital claims are running below expectations, which will support margin expansion for private health insurers. It also says that Medibank’s pivot towards broader health services, including specialists and primary care, will support a multiple expansion.

Question 4: What is the ASX code for the new IPO for GemLife?

Answer: The biggest IPO this year, GemLife Communities Group will debut on the ASX on Thursday 3 July. Its ASX code is GLF. GemLife has raised $750m through the issue of shares priced at $4.16.

If you are not familiar with GemLife, it is one of Australia’s leading developers and owners of communities for the over 50’s. The bulk of GemLife’s portfolio is located in Queensland.