Half Australia’s pension bill gouged by super fees 27



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Businessman hand giving money - Australian dollars

This week’s National Reform Summit revealed a shocking figure that is undermining Australian’s efforts to fund themselves during retirement.

According to John Daley, chief executive of the Grattan Institute, fees associated with superannuation accounts are costing us $21 billion a year – that’s the equivalent of half the national age pension bill.

The Australian Financial Review reported that Mr Daley believes there is insufficient competition in the sector, meaning super funds can charge what they like in fees.

The Grattan Institute suggests a tender process that could save up to $5 billion in fees.

“That’s about a third of a per cent of GDP. There’s not a lot of other reforms we could look at that would deliver that kind of return,” he said.

Michael O’Neill, chief executive of National Seniors, says $21 billion in super fees is astonishing.

“Whether you are an industry fund or retail fund the message is pretty strong: it’s a retirement income, it needs not to be gouged by fees and charges,” he said.

Mr O’Neill is calling on both sides of parliament to work together and come up with policies that prevent superannuation funds from taking a large bite out of Australians’ nest eggs, and that the regulator may have to step in.

Independent researcher SuperRatings compared the average annual fee of non-profit super funds ($484) to other funds ($851) based on a $50,000 balance.

Delegates at the summit agreed that the purpose of superannuation – that is, providing sustainable retirement incomes – needs to be clarified, with Paul Howes from KPMG saying it should be written into law.

How much do you pay in super fees? Do you think they are excessive? 

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  1. The Fee’s are way to high, This Government complains about people being on the pension, well when they going to do something about the people running these funds and skimming money off the top of earnings your super makes ? Perhaps more people would not need to go on the Pension if the fee’s were not so high

  2. Yo You can live well on a part pension, with a bit of super and some investments if you have paid off your home and like the simple things in life.. I do ok and travel if I want to, buy what I want and still help my kids out too…

  3. If there are large amounts of money accumulating anywhere, you will find blood suckers with dirty fingers stuck into the pile. About time the powers that be stopped this rort and allowed Australians to retire in peace without having to keep paying and paying.

  4. It is an absolute disgrace the amount of RORTS going on in this Country, it is difficult to put a stop to it because the very people who should be able to control it are also RORTING the hard working TAXPAYERS of Australia.

  5. i was told to leave 100 dollars in my super fund to keep it open, after 12 months went to with draw it,,, was told it had gone in fees, wtf, fees it wasnt doing any thing but getting minimal interest

  6. What annoys me is the fund takes the same level of fee even if your investment has gone backwards. After the sale of a house my financial adviser recommended a superfund. I should be able to sue for false advertising, adviser, yes but not in my best interest only he and the Superfund have actually made any money as mine is trickling away.

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