Warning on super fee erosion
There is a risk that superannuation funds will be the only winners from a move to lower the superannuation threshold to encompass low income earners unless appropriate safeguards are put in place, according to Sydney chartered accountant, Wayne Wanders.
Wanders has issued an analysis of what might happen if the current $450 a month super threshold is lowered under current arrangements and has warned that risks being substantially eroded by superannuation fund administration and exit fees.
“Most superannuation funds whether they be retail or industry funds charge regressive administration and exit fees and these fees are the same whether you have $500 or $50,000 in superannuation,” Wander said.
“Fundamentally, there are a lot of reasons why it makes sense to remove this threshold and have all employees get paid superannuation irrespective of what they earn but this change has to be made properly or the only real winners will be the superannuation funds themselves,” he said.
Wanders said that if the industry really had the interests of low income earners at heart it would not only pursue the removal of the threshold but also the regressive administration and exit fees which served to erode account balances.
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