Superannuation fund members examining the administration fees they are being charged don’t necessarily need to know if their superannuation fund achieved a tax deduction, according to the Association of Superannuation Funds of Australia (ASFA).
In a submission filed with the Australian Securities and Investments Commission (ASIC) on fees and costs disclosure, ASFA argued that what is relevant to consumers is the net amount of the administration fee deducted.
“What is not relevant to the consumer is the concept of an income tax deduction the trustee may have been able to claim with respect to the underlying costs – not with respect to the administration fee,” the submission said.
It stated that what should be disclosed to consumers in their period statement was the amount of the administration fee paid by the member.
“In circumstances where a gross administration fee is levied, and a tax rebate paid to the member separately, two transactions should be disclosed,” the submission said.
It said that it believed more work needed to be done with respect to how administration fees should be disclosed to consumers in product disclosure statements (PDSs).
Elsewhere in its submission, ASFA said that it strongly supported underlying policy intent of transparent and consistent disclosure of fees and costs to members.
“There are differing views, however, as to the nature and extent of fees and costs disclosure which is meaningful to consumers and able to be used appropriately by them to their benefit,” it said. “Currently there is a great deal of confusion among consumers, and advisers, as to how to interpret and apply the disclosure of fees and costs.”