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.
Industry Super Australia has accused the government of giving retail funds a leg-up with the benchmarks, claiming retail products have administration fees that are 75 per cent higher than the median MySuper member.
Administration fees that cost member balances as much as 1.02 per cent could fly under the radar, the industry body has said.
It has projected that 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.
Matthew Linden, deputy chief executive of Industry Super Australia, commented every fee should be counted towards capturing the net performance of a fund.
“Workers can only be protected if every fund and every fee is included in the tests,” he said.
“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.”
Cbus has also raised concerns around the reforms causing an uneven playing field – pointing to the proposed changes for the best financial interests duty, which would require funds to justify investments and expenditure, particularly ad spend.
Its fear is that retail funds would be able to escape the same scrutiny in their spending decisions by using their parent company’s capital.
If passed in its current form, the Your Future, Your Super legislation would take effect from July. It is currently in front of the House of Representatives.
Union funds love having their own carve out, uneven playing field, mis-labelling assets and asset allocations for members, rorting fees via ‘consultation fees’ to unions or political advertising but when the LNP want to level things out, you have never heard a bigger bunch of whiney whingey effing sooks carry on.
They are literally the soccer players of the Australian financial system.
Oh and yes, ASIC is corrupt.
When certain industry funds keep the franking credits of pensioner members in order to keep their “low admin fees” mantra whilst retail pass them on in full its time to cry me a river.
Thanks guys we needed to have a good laugh in this unrelenting environment planners are in. Industry funds complain about vested interest.. stop it you’re killing me.
Pretty sure Industry Super funds enjoyed some Carve outs at the Royal Commission. Why did the RC open a can of worms with Super funds and then stop at the Banks? I’d like the CEO of AwareSuper to front a Commission and be asked about, member funds being used via bonds to purchase a financial advice business that was written down, due to fees for no service.
[b]”the”[/b] advocacy group for union (aka “industry”) super?
Apart from ISA there is AIST, ASIC, ACTU, Choice, and the Labor Party who are also advocacy groups for union super. Then of course there’s all the individual unions like AWU, CFMEU etc.
Yes look after the workers, as they pay your wages, so if you want to talk about self interest maybe look into he backyard at home, see that new lawnmower, yes it was paid for by workers admin fees, see your new 1M house in north sydney, build on admin fees paid by poor workers. What cost benefit do the workers get for paying the lobby groups wages? Where are these retail funds with 1.02% admin fees? Up the faraway tree?
Yes, how dare people have representatives stand up for their interests. Almost as bad as the wealthy with teams of lawyers.
[i]see your new 1M house in north sydney[/i]
Uhhh… $1m doesn’t even get you the median house in Sydney.
How is that even a comparison? People pay lawyers directly for work, lawyers dont live
off poor workers admin fees, and usually they actually add some sort of value. They also charge people by the hour. How many workers do you think would put thier hand into the pocket to pay any of these lobby group peoples wages? Not many judging by the ever declining union membership base for one. Thats why they are paid sneakily via contributions to this organisation from the funds and dont work for the fund itself, there is next to no transperancy. As if a normal worker could connect those dots to see whos pockets the admin fees end up in. Thanks for the clarification re house prices in north sydney, a meaningful contribution to the debate if ever I read one.
From the masters of vested interests
Of course, rorting the Franking Credits on Shares only for Industry Funds to enjoy (at the last Federal Election) didn’t reek of vested interests either? lol
It is amusing when the union funds are complaining about an uneven playing field. It is a bit rich considering the number of carve outs their comrades in the ALP have given them, and the green light their comrades in ASIC, APRA etc have given them to do as they please.
But Labor are not in power?
They have a point, though their fees seem to be going up and some industry funds are quite expensive by now. Could they now be more transparent as well?
Well the Industry funds are the experts in “vested interests” after all!
Watching Industry Fund advocates squeal about “vested interests” is hilarious.
Pass the popcorn.