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Government favouring retail funds, industry super says 09 April 2021
Industry Super Australia has accused the government of giving retail funds an unfair advantage, allowing them to pass high administration fees past its proposed performance benchmarks.
The draft Your Future, Your Super legislation does not include administration and other investment fees in its proposed net performance benchmarks.
The proposed measure will see APRA assess the performance of funds annually, with those that are deemed underperforming two years in a row to be blocked from receiving new members. Members will be notified if their fund drops below 50 basis points of the benchmark. Advertisement
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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 defends ‘highly cost-effective’ ad spend Lachlan Maddock 08 April 2021
Lobby group Industry Super Australia says that its multimillion-dollar advertising spend is in the best financial interests of members.
Speaking to the Senate economics legislation committee, ISA deputy chief Matthew Linden denied that its advertisements around the superannuation guarantee increase were “misleading and deceptive” and said they were attempts to better inform members.
“You’d have to be living under a rock to not understand that there are very significant efforts being made to alter the arrangements around the superannuation guarantee and proposals to breach the preservation rules and allow people to access their superannuation for a whole range of purposes,” Mr Linden said.