1. I’m 65. Can I now make a contribution to super? Are there any other changes for the financial year?
Yes you can! Australians aged 65 and 66 years can now make a contribution to super without having to meet the work test. This covers both concessional and non-concessional contributions, and essentially means that ‘67’ is the magic super age, just as it is for aged pensions.
Along with this change, the Government says that it will legislate to allow 65 and 66–year–old persons to access the “bring-forward rule”. The rule allows an individual to make up to 3 years’ of super contributions in one hit. This means that a 65–year–old could potentially contribute $300,000 into super, a couple could get $600,000 into super. (Note: this is not law yet).
The age limit for spouse contributions will increase from 69 years to 74 years.
The final two changes relate to COVID-19 relief measures. If you have been adversely financially affected by Covid-19, you can apply to access up to $10,000 of your super. This is in addition to any amount you accessed last financial year (i.e. prior to 1 July). The early release scheme closes on September 24.
And for retirees who depend on account based super pensions, the Government has reduced the minimum annual payment by 50%. The minimum payment is based on your age, according to the factors in the following table:
For example, if you were aged 66 on 1 July and had a balance of $1,000,000, your minimum payment is 2.5% of $1,000,000 or $25,000. You can take your pension at any time or in any amount(s), but your aggregate drawdown over the year must exceed the minimum amount. If you commence a pension mid-year, the minimum amount is pro-rated according to the number of days remaining until the end of the financial year.
2. Rudi Filapek-Vandyck [1] and other commentators keep referring to “confession season”. What is “confession season”?
Under ASX listing rules for continuous disclosure, companies must immediately advise the market of any information that could be expected to have a material impact on the price of their shares. This obviously includes information about their earnings. If a company has provided earnings’ guidance and then becomes aware that their profit is likely to be outside the guidance range, they would be expected to advise the market immediately. There are also conventions relating to analysts’ estimates and when the broker consensus forecasts are out by more than 10%.
Now that we are in July, most companies with a 30 June balance date will be finalising their financial results. Because these need to be audited, they haven’t scheduled market briefings until August. However, they will generally know, within a couple of percent, the final profit number sometime in July.
So, “confession season” refers to that period between now and the August reporting season when companies with a sub-par result (below guidance or away from broker consensus forecasts) “fess-up” and tell the market.
3. I’m keen to hear your thoughts on oOh!Media (OML). I feel it has been oversold – hold off or one to add at a reasonable price?
oOh!Media (OML) has been badly hit by the pandemic, with revenues plummeting. It slashed costs, put staff on a 4–day week and did an emergency capital raise at $0.53 per share. The shares climbed back as high as $1.24 and are now trading at $0.98. I am not sure that this substantiates your “oversold” view.
While the analysts are positive on the stock (4 buys, 0 sells), the consensus target forecast is $1.24. Range is tight – a low of $1.15 from Morgans through to a high of $1.29 at Credit Suisse.
oOh! held its AGM in early June but didn’t provide much information about current trading conditions and the revenue outlook – the focus seemed to be more on the work they had done to control costs.
Looks like a real play on the virus and the speed of economic recovery. Given that they raised capital at $0.53, unless you are bullish on the recovery, my hunch is that upside potential is not large. Pass.
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Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.