Aussies stung by high superannuation fees: report

Written by admin on 30/07/2019 Categories: 苏州美睫

Research by the Grattan Institute finds Australians pay about $20 billion in fees each year.

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That’s three times more than the median paid by OECD economies where superannuation pools are much smaller.

The analysis is timely as a debate rages over the need to lift the retirement age amid rising costs to the federal budget.

The report’s author, economist Jim Minifie, says there is anargument that the complexity of Australia’s superannuation regulations increases the cost of the system.

 

“If this is true, it reveals the urgent need to reduce regulation,” he says in the report released on Sunday.

However, the wide variation in fees charged by funds suggests super businesses are choosing to charge higher imposts.

 

Dr Minifie also believes recent reforms will not help much.

MySuper – a more uniform set of products for people who do notactively choose their funds – makes funds easier to compare, but does little to relieve the pressure of fees.

Dr Minifie says fees should be at least halved.

He believes the cost could be substantially reduced if thegovernment selected a small number of default funds every few years with a tender based on fees.

All new job starters would pay into these funds, unless they optout and choose their own.

To push down fees for existing accounts, tax time at the end of June should also be superannuation choice time.

A new step in the tax return process should encourage taxpayersto compare their current fund with the low-cost winners of the default tender.

Dr Minifie concedes these measures may reduce the revenues ofsuper funds.

“More importantly, they will reduce the sting of high fees,” he said.

Oppositions defends record on super reforms

Opposition finance spokesman Tony Burke has defended the previous Labor government super reforms amid claims Australians are paying excess super fees.

Labor has defended its superannuation reforms in the wake of a report that Australians are still paying too much in fees.

The previous Labor government passed Stronger Super legislation in 2012 to simplify default products, cut administrative costs and improve governance of funds.

The changes are being phased in until 2017.

At the time the government predicted the reforms would reduce the average fees paid by members by up to 40 per cent.

“But fee cuts of that size do not appear at all likely,” the report said.

Opposition finance spokesman Tony Burke there was a need to be vigilant on super fees.

Mr Burke said the reforms were still working their way through the system.

“To expect the cumulative impact of these structural changes to happen instantly would be a stretch,” he told ABC Radio on Monday.

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