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.”