Cost of super falls but Australians still paid $29 billion in fees last year

Australians paid fees to superannnuation funds of $29 billion last financial year, or about $2400 each, according to a report from financial services data firm Rainmaker.

Sep 21, 2020, updated Sep 21, 2020
Collection House has called in the administrators

Collection House has called in the administrators

The total was a record low for super funds and down 5 per cent on the previous year, but still reflects about 1.6 per cent of gross domestic product, according to Rainmaker.

The company said the funds were continuing to reduce fees following Federal Government changes contained in the Future of Financial Advice reforms, which Rainmaker said had been “massively reformist”. It included the banning of advice commissions which led to a big cut in fees paid by retail fund members.

Retail fund members own 23 per cent of funds under management but paid 29 per cent of fee revenue. Self-managed super funds held 25 per cent of funds under management but paid 19 per cent of fees.

The not-for-profit sector holds about 52 per cent of funds under management and Rainmaker said they contributed about the same percentage in fees. It said members of NFP sector funds still were the lowest fee payers.

The Association of Superannuation Funds of Australia (ASFA) said up to $600 million would be placed into the superannuation accounts of nearly 400,000 Australians due to the one-off superannuation amnesty.

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“Every additional dollar in people’s superannuation account will have an impact on the adequacy of people’s retirement,” said ASFA deputy chief executive Glen McCrea.

“Sadly, too many individuals are missing out not only on their superannuation contributions but the potential returns from having more money in their super account.

“We congratulate the Government and the Assistant Minister for Superannuation, Financial Services and Financial Technology, Senator Jane Hume, on the success of this one-off amnesty. In combination with the additional integrity measures legislated early last year, it will help get more money in people’s superannuation accounts for their retirement where it belongs.

“It is essential that all employers should comply with their superannuation guarantee obligations and pay Superannuation Guarantee contributions when they are due,” McCrea concluded.

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