Good points, and thanks for your replies.
I'll try and explain by way of example.
To make the maths easier, lets assume a fund with $3.2m, about 50% in growth assets and 50% in cash/bonds.
The dividends and interest will be split and thus 50% of same will be excluded from tax, and the other 50% taxed at 15%. Now, if one wants to divest some of the shares and buy other shares then 50% of the capital gain will be taxed at either 15% or 10% if held for X period. Over a period of say 10 years a fair amount of buying and selling will go on and thus the gains will be taxable for about 50% of the value.
If on the other hand one runs two separate funds the $1.6m in assets can grow completely tax free for ever. Until the mandatory withdraw rate starts to get towards 10%, or more, it is probable that the dividend and capital growth will outstrip the annual withdraw, so the fund will likely continue to grow well into retirement.
The cash fund will pay 15% tax on the interest. Any withdraws above the minimum would be taken as a lump sum cash out of the accumulation (cash) fund.
As an alternative strategy if one was to invest in buy and leave type shares one could hold them in the accumulation fund and just pay the 10% CGT at the end, and have the cash fund earning tax free income albeit with current cash deposit rates the income would be less tan the withdraw each year so the pension fund would gradually run down over the years.
It is a real challenge to work out the most efficient way forward and I fear it will need a really good spreadsheet with lots of 'what if' scenarios. The additional cost of about $1k per year may be worthwhile and may not, but in the above example of a $3.2m pot it has be to worth the exploration. At any point in time one could revert to a single fund if the benefits are not was expected.
