Warning on super fee erosion

30 October 2017
| By Mike |
image
image
expand image

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.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 1 week ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 1 week ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 5 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

17 hours 35 minutes ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 3 days ago