Super performance test gives poor performing funds ‘leg up’

9 April 2021
| By Jassmyn |
image
image image
expand image

The government’s superannuation performance test proposed in its Your Future, Your Super legislation does not include administration fees and other non-investment charges which could lead to super funds charging up to four times the median fees, according to Industry Super Australia (ISA).  

ISA said leaving out the charges gave poor-performing retail products “a leg up”, which on average had administration fees 75% higher than the median MySuper member. Administrative fees which “gouged” 1.02% from member balances could fly under the radar.  

It also said within the MySuper sector, the fund with the lowest administration fees could deliver a full-time worker in their 30s almost $160,000 more than a fund with the highest. 

ISA deputy chief executive, Matthew Linden, said: “When it comes to workers’ retirement savings, measuring the performance of super funds should be a matter of one in all in- every super fund and every fee. 

“The government’s plan to shield the worst-performing retail funds from proper scrutiny could mean millions of workers get stuck in a dud fund for life. 

“Workers can only be protected if every fund and every fee is included in the tests. Anything less than that reeks of vested interests inappropriately influencing the benchmarks and the government running a protection racket for dud profit generating funds - and that could leave workers worse off.” 

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

5 months ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

5 months 1 week ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

7 months 1 week ago

The FSCP has issued a written direction to an adviser who charged clients “extraordinary fees” for inappropriate and conflicted advice, as well as encouraged them to swit...

1 week 6 days ago

ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager. ...

3 weeks 2 days ago

ASIC has confirmed the industry funding levy for the 2024–25 financial year, and how much licensees can expect to pay....

3 days 20 hours ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND
Fund name
3y(%)pa
2
DomaCom DFS Mortgage
95.46 3 y p.a(%)
5