Retirement
Admin fee backflip rewards 13 of the top 20 ‘fee-gouging funds’
Thirteen of the 20 funds that will benefit most from the last-minute changes to the Your Future, Your Super performance test are for-profit funds, new research has revealed.
Admin fee backflip rewards 13 of the top 20 ‘fee-gouging funds’
Thirteen of the 20 funds that will benefit most from the last-minute changes to the Your Future, Your Super performance test are for-profit funds, new research has revealed.
As part of the Your Future, Your Super reforms, funds that were originally going to have to disclose eight years’ worth of admin fees will now only have to disclose one, giving some funds the ability to possibly whitewash years of exorbitant fees.
This is despite the fact that one of the key reasons the changes to super were implemented was to lift funds’ overall performance. Namely, a MySuper product that falls 50 basis points below the performance benchmark will be forced to ink a letter to its members informing them of its underperformance, giving members the choice to jump ship.
But since the latest government backflip, the fees under review will only include those in the last 12 months.
As such, new research released by Industry Super Australia revealed that not only will some funds benefit, but 13 of the 20 benefactors are for-profit funds, which have, as a result, all improved by more than 10 basis points.
The new reporting system will see retail funds now perform on average 7 basis points better, while non-fee charging industry funds fall by 3 basis points.
According to Industry Super Australia’s chief executive, Bernie Dean, millions of workers could be unknowingly stuck in a dud fund due to the government’s backflip.
“Some of the worst-performing funds could take advantage of the government’s sneaky backflip and pass the test when they may otherwise have failed, leaving millions of Australians unaware that they’re with a dud fund and could get a better deal elsewhere,” he said.
Naming names, the ISA noted that AMP Capital’s MySuper product will see an improvement of about 20bps in its performance.
BT and Commonwealth Essential Super will also see their performance assessment scores benefit from the last-minute administration fees backflip.
ISA noted that publicly available data shows that under the previous methodology, the funds that were at risk of failing the benchmarks may now move it out of the danger zone.
But the ISA is also worried about longer-term fee gouging.
“The government is letting some of the biggest dud funds off the hook, and it will be their members that will pay the price with less in retirement savings, compared to what they’d get if they switched to a better-performing fund,” Mr Dean cautioned.
About the author
About the author
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more
Superannuation
Survey reveals Australians' reliance on superannuation for retirement
A new survey by AustralianSuper has found that only 32% of Australians believe they could save for retirement without compulsory superannuation. Read more
Superannuation
AMP launches national campaign to boost super engagement
AMP has unveiled a new national advertising campaign aimed at encouraging Australians to engage more actively with their superannuation. Read more
Superannuation
AustralianSuper urges action on gender pay gap for Equal Pay Day
AustralianSuper, Australia's largest superannuation fund, is calling for increased focus on the gender pay gap and its long-term impacts on women's retirement savings this Equal Pay Day, August 19. Read more
Superannuation
AMP advisers focus on super contributions and home ownership queries
Financial advisers are prioritizing assistance with superannuation contributions, transfer balance caps, death benefits, and home ownership issues, according to recent data from AMP Advice. Read more
Superannuation
Aware Super reports strong 11.02% return for flagship investment option
Aware Super, one of Australia's largest superannuation funds, has announced an 11.02% return for its High Growth accumulation option in the 2024 financial year. Read more
Superannuation
Retirement savings strategies: How to boost your superannuation
Superannuation is a pivotal part of retirement planning in Australia, offering a tax-effective way to save for your later years. As you navigate through your working life, enhancing your ...Read more
Superannuation
Aware Super takes on Australia's gender retirement gap, aiming for financial equality
Aware Super, one of Australia's largest superannuation funds with a 70 per cent female membership, is on a mission to close the gender gap that sees women retire with 30 per cent less super than men ...Read more
Superannuation
Age Pension increase prompts Australians to review their finances
The increase in the Age Pension, which takes effect today, should serve as a prompt for many older Australians to ensure they're maximizing their income as cost-of-living pressures persist, according ...Read more