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.
Super funds could boost returns by 59bps: Report12 November 2019, 11:48amSuperannuation funds considering a merger or major investment portfolio changes should implement a program to manage tax costs and transaction costs to deliver meaningful benefits to funds and their members ... Read more
Retail funds shrink unlisted assets11 November 2019, 12:40pmSuperannuation funds now have close to $240 billion in unlisted assets, but retail funds have a smaller proportion of their assets allocated to them than five years ago. Read more
Legal fight could change super game8 November 2019, 12:15pmRest, the $57 billion industry fund, continues to battle a legal fight brought by one of its members that could have consequences for the entire superannuation industry. Read more
APRA begins super data transformation efforts8 November 2019, 11:21amAPRA is embarking on a multi-year project to improve the quality of its superannuation data collection that will pave the way for the proper comparison of super products, with choice super set to come ... Read more
Actuaries develop retiree rule of thumb7 November 2019, 12:37pmA group of actuaries have answered the calls of retirees looking for a simpler way to determine how much money they should draw out of their savings in retirement, developing a new three-part rule of ... Read more