Almost one fifth of Australian superannuation accounts to have their fees slashed, thanks to new legislation
SelectingSuper Media Release - Monday 25 February 2019
In the wake of the recommendations handed down by the Royal Commission into financial services, five million superannuation accounts might have their fees slashed, with AMP, Hostplus and ANZ OnePath to be impacted the most.
Analysis has found that of the 28 million superannuation accounts safeguarding over $2.7 trillion in assets1, over 5 million accounts are in line to have their fees cut to less than 3% on the back of the recent 'Protect your Superannuation' legislation that passed through the Senate last Thursday (14/2/2019).
AMP Super, Hostplus and ANZ OnePath are set to face the biggest impact with accounts under $1000 representing 34%, 32% and 41% of their total number accounts respectively. These analyses by Rainmaker Information based on APRA data and are published by SelectingSuper.
Other funds with large numbers of small superannuation accounts are REST, Sunsuper, BT Financial Group and AustralianSuper, noted Rainmaker.
"Many of Australia's leading super funds each have hundreds of thousands of small accounts owned by young people. For these members just starting out in super, if their fund has a flat dollar member fee of say $100 per year it can translate into extremely high percentage fee rates. If the reforms pass into law this will be a real win for these consumers," said Alex Dunnin, director of research at Rainmaker.
"It's time younger super fund members stopped having to subsidise older super fund members. It's simply a matter of doing what is fair," he added.
"Successful passage of these fee reforms should either see the end of flat dollar fees which for young low balance members are regressive, or funds will introduce account balance and age thresholds for newly designed fees," said Dunnin.
Among the 'Protecting Your Superannuation' regulatory reforms to now be put before the House of Representatives:
With the assistance of the Australian Taxation Office (ATO), low balance superannuation accounts and that have been left for over 16 months will be automatically consolidated.
Accounts to the value of $6000 or less will have fees capped at 3%
Superannuation exit fees will be removed, allowing members to move freely to another fund.
Super funds with the most balances less than $1000 as at 30 January 2018
Percentage of fund
1Source: APRA Statistics - September quarter 2018 and APRA annual statistics for no. of accounts.
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