POWERED BY MOMENTUM MEDIA
RC told of super account erosion
Unintended multiple superannuation accounts are collectively costing fund members $1.9 billion a year in excess insurance premiums, according to a background paper provided to the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
The background paper, prepared ahead of the Royal Commission’s insurance-related hearings next month, has served to reinforce the reality of account erosion owed to insurance premiums.
It noted, as well, that the Superannuation Industry (Supervision) Act obligates superannuation funds to acquire or offer insurance of a particular kind or at a particular level “only if the cost of the insurance does not inappropriately erode the retirement incomes of beneficiaries”.
“The unintended multiple accounts for a member collectively cost the members who hold them $1.9 billion a year in excess insurance premiums,” it said.
“The Productivity Commission Report considered that the effects on retirement balances are worse for members on low incomes, especially those with intermittent labour force attachment who continue to have premiums deducted from their accounts while not contributing to their super.”
The background paper said the retirement balance erosion for these members could reach 14 per cent ($85 000), and well over a quarter for some disadvantaged members with duplicate insurance policies ($125 000).
Recommended for you
Australian super funds have posted early gains in FY26, driven by strong share market performance and resilient long-term returns.
Following the roundtable, the Treasurer said the government plans to review the superannuation performance test, stressing that the review does not signal its abolition.
The Australian Prudential Regulation Authority (APRA) has placed superannuation front and centre in its 2025-26 corporate plan, signalling a period of intensified scrutiny over fund expenditure, governance and member outcomes.
Australian Retirement Trust (ART) has become a substantial shareholder in Tabcorp, taking a stake of just over 5 per cent in the gaming and wagering company.
TOP PERFORMING FUNDS
ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
1
DomaCom DFS Mortgage
74.26 3 y p.a(%)
2
Global X 21Shares Bitcoin ETF
72.60 3 y p.a(%)
3
Global X GlobalX FANG+ ETF
44.46 3 y p.a(%)
4
Pengana High Conviction Equities B
39.12 3 y p.a(%)
5
Pengana High Conviction Equities A
39.05 3 y p.a(%)
