Warning on super fee erosion

There is a risk that superannuation funds will be the only winners from a move to lower the superannuation threshold to encompass low income earners unless appropriate safeguards are put in place, according to Sydney chartered accountant, Wayne Wanders.

Wanders has issued an analysis of what might happen if the current $450 a month super threshold is lowered under current arrangements and has warned that risks being substantially eroded by superannuation fund administration and exit fees.

“Most superannuation funds whether they be retail or industry funds charge regressive administration and exit fees and these fees are the same whether you have $500 or $50,000 in superannuation,” Wander said.

Related News:

“Fundamentally, there are a lot of reasons why it makes sense to remove this threshold and have all employees get paid superannuation irrespective of what they earn but this change has to be made properly or the only real winners will be the superannuation funds themselves,” he said.

Wanders said that if the industry really had the interests of low income earners at heart it would not only pursue the removal of the threshold but also the regressive administration and exit fees which served to erode account balances.

Related Content

Super no longer a wealth transfer mechanism

The Federal Government appears to have substantially achieved its goal of limiting the degree to which superannuation can be used for wealth transfer,...more

No super segment safe from consolidation

No segment of the superannuation industry will be excluded from the Australian Prudential Regulation Authority’s (APRA’s) moves to encourage funds...more

Industry being choked by regulatory over-reach

The superannuation industry is being subjected to the distraction of regulatory over-reach, according to the independent chairman of the Association o...more



Add new comment