Retirement
Super switching leaving consumers short-changed
Around half of Australians who switch funds are copping “significantly higher fees” while simultaneously seeing lower returns, Industry Super Australia has said.
Super switching leaving consumers short-changed
Around half of Australians who switch funds are copping “significantly higher fees” while simultaneously seeing lower returns, Industry Super Australia has said.
The new Rice Warner report, commissioned by Industry Super, reveals that in the year to June 2015, the estimated increase in super fees for those members paying higher fees came to $170 million per annum.
The research was informed by data from the Australian Prudential Regulation Authority together with Rice Warner’s own Superannuation Study.
According to those datasets, the vast majority (92 per cent) of those experiencing higher fees and lower returns, courtesy of switching, had occurred within the retail sector.
That figure accompanies the fact that retail super funds were the most common switching destination, accounting for 72 per cent of switches.
“Technology and banking relationships are being used to entice people to switch without thinking. It is clear fee disclosures and consumer safeguards need to be urgently strengthened,” said the public affairs director at Industry Super, Matt Linden.
“Logically, consumers exercising informed choice would switch to lower-fee and higher-performing super funds but the reality is quite different,” he continued.
“It appears that consumers are simply making uninformed decisions in a highly complex area.”
The survey found that the majority of switching occurred with clients around the age of 30, before peaking again just before retirement age.
Further, those with balances in excess of $50,000 were more likely to switch to retail funds and those with balances of more than $100,000 were twice as likely to switch to an industry fund, as opposed to a retail fund.
However, the smaller the fund size, the more likely they were to be rolled over to another fund, regardless of the sector.
Superannuation
Senator slams super funds: ‘People are smarter than super funds think’
Senator Andrew Bragg has hit out at superannuation funds after they stood up in opposition to the government’s alleged plan to ask workers to choose between putting money in their super or having m...Read more
Superannuation
Why opt-in super proposal is a ‘secret tax’ on Aussie workers
A proposal to give workers the option to pick between a wage rise or a super contribution increase has been slammed by industry funds, branding it as “a secret tax” on workers. ...Read more
Superannuation
Early super access could be less than expected
Money accessed through the early release of super scheme looked to be coming in under the government’s revised expectations as the scheme drew to a close at the end of 2020. ...Read more
Superannuation
Proposed super reforms to rob millions of Australians
Australia’s largest union has rejected the government’s new super reforms on the basis it will leave members worse off long-term due to being “stapled” to a high-fee fund. ...Read more
Superannuation
ISA takes another shot at super reforms, accuses government of favouring big banks
Just a few days after hitting out at the government’s Your Future, Your Super scheme, ISA is at it again, signalling to the government that it may have a fight on its hands when it comes to this now...Read more
Superannuation
Royal commission reforms pass Parliament signaling more super oversight
The first bill implementing recommendations from Hayne’s banking royal commission has passed through the Parliament. ...Read more
Superannuation
Fears half of super system may be exempt from performance test
While the Your Future, Your Super measure has been a topic of debate for weeks over its ability to create possibly unintended consequences, new questions have emerged about the measure’s ability to ...Read more
Superannuation
AustralianSuper tops $200bn in assets, aims for mega fund title
AustalianSuper has become the country’s first fund to top $200 billion in assets despite the harsh economic conditions which saw Australia dive into its first recession in 30 years. ...Read more
Superannuation
Senator slams super funds: ‘People are smarter than super funds think’
Senator Andrew Bragg has hit out at superannuation funds after they stood up in opposition to the government’s alleged plan to ask workers to choose between putting money in their super or having m...Read more
Superannuation
Why opt-in super proposal is a ‘secret tax’ on Aussie workers
A proposal to give workers the option to pick between a wage rise or a super contribution increase has been slammed by industry funds, branding it as “a secret tax” on workers. ...Read more
Superannuation
Early super access could be less than expected
Money accessed through the early release of super scheme looked to be coming in under the government’s revised expectations as the scheme drew to a close at the end of 2020. ...Read more
Superannuation
Proposed super reforms to rob millions of Australians
Australia’s largest union has rejected the government’s new super reforms on the basis it will leave members worse off long-term due to being “stapled” to a high-fee fund. ...Read more
Superannuation
ISA takes another shot at super reforms, accuses government of favouring big banks
Just a few days after hitting out at the government’s Your Future, Your Super scheme, ISA is at it again, signalling to the government that it may have a fight on its hands when it comes to this now...Read more
Superannuation
Royal commission reforms pass Parliament signaling more super oversight
The first bill implementing recommendations from Hayne’s banking royal commission has passed through the Parliament. ...Read more
Superannuation
Fears half of super system may be exempt from performance test
While the Your Future, Your Super measure has been a topic of debate for weeks over its ability to create possibly unintended consequences, new questions have emerged about the measure’s ability to ...Read more
Superannuation
AustralianSuper tops $200bn in assets, aims for mega fund title
AustalianSuper has become the country’s first fund to top $200 billion in assets despite the harsh economic conditions which saw Australia dive into its first recession in 30 years. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
