Bidders vulnerable as seller falls foul of law by attempting to auction his superannuation on online marketplace Ebay.
McInnes Wilson Lawyers Brisbane principal Neal Dallas is cautioning against bidding for someone’s superannuation payout after recent reports an Adelaide man was selling his on eBay.
The 31-year-old listed the item at a starting price of $1; bidding then raised the price to approximately $2000 before the auction was taken down.
It was a ‘double your money’ offer, with the seller claiming he would pay double to the buyer at the end of the auction and give them his entire superannuation upon retirement.
Superannuation legal expert Dallas says current Australian superannuation laws prevent agreements like this from being guaranteed because they involve a transfer to a third party.
“The successful bidder has no way of forcing the superannuation fund to pay the benefit to you.”
Adding to this, if the seller dies or becomes disabled before 65, this complicates the matter even further.
“The fund would then in all likelihood pay the benefit to his spouse or children,” Dallas says. “This could leave the successful bidder chasing the man’s estate for the funds which wouldn’t only erode the amount of the estate, but also cause significant heartache for all concerned.”
“Plus, his spouse or children would have absolutely no obligation to honour his agreements.”
Dallas recognises the desire to access funds now – particularly under certain circumstances – but stresses keeping all superannuation secure for retirement.
“Younger people sometimes get frustrated because they can’t see the benefit of having a large sum of money they can’t immediately access,” he says. “However, if they didn’t have superannuation, they would be so much more frustrated come retirement.”
Dallas also expresses concern about additional services involved in drafting such agreements, which bidders may be unaware of.
“The most bizarre thing to me was that the seller didn’t specify who would be paying the lawyer to put together the agreement, a necessity which could cost around $2000.
Get our daily business news
Sign up to our free email news updates.
Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support