Question: I am over 60 years of age and still working full time. Can I convert my super fund from Accumulative Fund to Pension Fund?

Answer (by Paul Rickard): If you are aged between 60 and 65 and not retired, you can only access your super if one of the following two conditions of release is met:

a) you start a transition to retirement (TTR) pension (note: earnings on the assets supporting a TTR are now taxed at 15%); or

b) you cease an employment arrangement.

Ceasing an employment arrangement means leaving a position of employment.

Obviously, an additional option is to permanently retire.

Question: What do you think of the takeover of Vocus and the chances of a higher bid or another bidder? Price is now heading lower than offer price. I hold them at higher levels.

Answer (by Paul Rickard): I really can’t add any insights into what is occurring with Vocus. The fact that the shares are now trading below the indicative price of the KKR offer suggests that:

a) either the market doesn’t believe the offer will proceed; or

b) there is unlikely to be a higher bidder.

The company has now granted KKR permission to conduct due diligence.

Question: Last year I bought Telstra (TLS) shares following a good recommendation from Charlie Aitken. I initially paid near $6.00 per share. As you would know, the bottom fell out of the TLS share price with news of a new carrier. I took the opportunity to buy more and have been able to average down the cost to $5.00 per share. Still losing around 13% on my holdings of $280,000, which I know is too much for my portfolio, however would prefer to keep until such a time when, and if, they reach the upwards of $5.00 per share. Any thoughts?

Answer (by Paul Rickard): I haven’t really changed my view on Telstra since my last report of 24 April (see here). Since that report, the ACCC has decided not to declare roaming, which gave Telstra a boost and took it to the $4.40 level.

Since this decision, it has largely traded in a very steady range between $4.30 and $4.45.

I think the market needs to see:

a) more from Telstra about its capital plans (which may include news about dividend policy);

b) progress on closing the NBN earnings hole.

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 regards to your circumstances.