Calls for the government to reduce super fund fees 8



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It’s not often talked about, and moreover, there’s not much you can do about it, but superannuation funds are taking $21 billion away from Australian every year – and it’s time the government helped out.

The Grattan Institute are calling for the government to change the high administrative costs and the convoluted way in which the superannuation sector currently operates. There are multiple accounts for people, too many different funds, and so many fees and yet nothing has been done to help the average Aussie get more in their pocket in retirement.

According to Jim Minifie from the Grattan Institute, “We pay $4 billion a year above what would be charged by [low cost, well administered] lean funds.

There are significant opportunities to reduce costs in both [default and choice] funds. Over time, the difference between a lean fund that charges say $125 per person and what’s implied in MySuper fees today, is about $40,000”. That’s quite a lot of money; are you willing to lose it?

In his report, which he will present at the AFR’s Banking and Wealth Summit next week, Mr Minifie wants the government to run a tender to select funds to operate default accounts used by most working Australians, and to close and merge smaller funds.

He estimates these processes could save $1 to $2 billion a year over time and should be run ASAP, as Australians are currently paying more than $200 a year on administration fees for the average default super fund and almost $800 for a fund of choice.

And if you have a self-managed super fund, you’re all paying around $5 billion in administration fees each year. Is it time that changed?

Tell us your thoughts below.

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  1. I will email this to a friend of mine, he lost his job along with many others about 12 months ago, he is a baby boomer and like so many others he can’t get another job. I feel sorry for the poor bugga, he is a qualified tradesman and their is no work out there. And don’t bother saying he can retrain, even if he did by the time he was qualified he would nearly be due to retire. He has been worried about his super and the fee’s eating it up

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  2. Starts at 60

    Is there someway you can stop these scam posts from people like Alicia Davies.
    They are scammers trying to get money out of elderly and vunerable people.

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    • that is so annoying and they come in under different names so you can’t block..if this was IRC..I would do a domain ban but on facebook it is hard

    • There are many who would like to block the troll posts from the Laba Pardy media office through Leanna Stevenson. I of course would oppose that because it would deprive me the opportunity to illustrate to all what a pinko TROLL she is. There are Leanna’s and there are lifters.

  3. “And if you have a self-managed super fund, you’re all paying around $5 billion in administration fees each year.” I have a self managed super fund and I certainly do not pay $5B pa. On a more serious note. It isn’t just the fees that are gouging. The “Industry” super funds skim much much more on your investments on the way through. Ask yourself why you cannot obtain the same % from them as you can from a bank for Cash. Time for a Royal Commission.

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