Sneaky super fees explained

Julie is outraged that she is expected to pay additional fees through her super.

Julie is outraged that she is expected to pay additional fees through her superannuation to fund the ‘fixing’ of the superannuation system. But has she been given the correct information?

Julie

I just looked at my superannuation statement and noticed two lots of fees that total over $300. Upon checking, I have discovered that they are apparently government fees designed to assist with the revamp of the superannuation system. Even though people like me, who are paying for it, will be dead by the time the system becomes workable. Is this just a new excuse for a sneaky tax?

I am left wondering why ordinary people like me are required to pay to have government revamp a super system, which was created by the ‘smart people’ in government? Added to this are the new bank fees the government wants to introduce on all deposits, because these so-called ‘smart people’ have failed to be forward thinking. All they can do is produce fee upon fee to fix their mistakes – and we end up paying.

Correct me if I am wrong but I thought superannuation was invented to ensure that working-class people like me, are able to pay their own way in old age? If the government keeps taking money from my superannuation fund as it does now, it won't be long before the government is funding my Age Pension. 

The majority of baby boomers started with nothing, worked hard, did without, paid and their taxes. Now we are seen as greedy individuals taking advantage of the system, when most of us expect nothing and, almost always get nothing, but we are happy to look after ourselves. 

We did not create the system, but now we have to pay to fix it. I’m gobsmacked.

Response produced by Adam Gee

We asked superannuation expert, Adam Gee from SuperRatings, to explains what were these new fees and will everyone pay them.

A number of funds are passing on the costs associated with many of the regulatory changes to superannuation over recent years. This is generally called a ‘Stronger Super Levy’ and consists of an asset-based additional administration fee. Many funds have also been required to build up an Operational Risk Financial Reserve to comply with government requirements and have passed this on to members through an additional ‘ORFR Levy’, which is a 7 – 8 basis point charge.

Unfortunately, given the raft of changes in recent years, a number of funds have chosen to pass on the costs, which is likely to be the fees being referred to by Julie.

Hopefully this clarifies the fees and why they have been charge. We hope this serves as a reminder of why it is important to regularly review your superannuation statements and whether or not the fund is the correct one for you.





    COMMENTS

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    Lescol
    8th Apr 2015
    2:01pm
    so Julie could change her fund???
    tj
    8th Apr 2015
    8:46pm
    Before any one decides to change funds remember that now if you do that it is considered a NEW ACCOUNT and you come under the new deeming rules that started jan this year.It is complicated so suggest get advice from centre link .A cynical person might think that the super funds are aware of of this and maybe they can up their fees knowing that if you change your pension could be affected
    so you are locked in to a certain fund
    just food for thought
    Not Senile Yet!
    8th Apr 2015
    2:08pm
    This is the reason why there is a mass exodus from Managed funds to SMF's and it is being driven by the Government continually interfering and changing the rules faster than you can butter your toast in the morning. Next they plan to lock it up and not allow Lump Sums at all!!
    No rewarding trip or payout of mortgage allowed unless you are dying/critically ill and unable to work!!! But even now if that happens before ur preservation age...they slug you with tax for taking it early!!!
    But none of the above applies to their super funds and all Government employees/Politicians/Judges etc etc are EXEMPT from any changes made to Industry Fund Rules.
    SMF's can invest their super where they like...even in property!!!
    The Government will be looking at taking a big bight of these Ripe Cherries next...but I bet they EXEMPT Their own Super as per usual!!!
    My Industry Fund recently upped the price of their Insurance by a whopping 67.5%.....as have others!!
    The reason offered....they are now experiencing more claims as the baby boomers age!!! Total crap...this was factored in when your rates were calculated over the 40yrs or so!!!
    Added to this dilemma is the fact that most Duper funds have a board (paid members) and at least 6-12 High Flying Executives all on more than 200-300 Grand as well as a CEO on even more!!!!
    Talk about Pigs at the trough and that's without the Government collecting a fortune by now taxing how much your fund generates for you each year!!!
    Between inflation, big Corporates and the Government....there won't be enough for people to retire...even at 70!!!
    Currently in a ten year cycle everything has gone up by 100% ....some things even more....Insurance, Rego's, Land Rates, Fuel and now they are eyeing off the GST as a way of gaining more revenue!!!
    Super is now so complicated you need a Lawyer to access it and several Specialist reports to prove that you exist and that you meet THEIR requirements!!!
    It was never meant to be taxed! Fees were supposed to fixed to CPI and no more...bahh humbug! It now a pig feast and not the investment it once was!!!
    particolor
    8th Apr 2015
    5:26pm
    In other words the System is STUFFED !! :-( By Greedy PIGS !! :-(
    That's why I put MY Money in an ordinary Savings Account,Pay the Tax Yearly on any Interest ! I can access My funds when I need too, And NO BLOODY PIG FOOD FEES !! :-)
    Koj
    8th Apr 2015
    6:59pm
    Change from Managed funds to SMF's... no problem, just go ahead and do it.
    No lump sums? a different matter completely. If you want to take a lump sum from a super scheme, to lock it into your own SMF or some other super scheme...no problem.
    But a super lump sum for the rewarding trip? (which has not been subject to the same level of tax as every other person who saved for a "rewarding trip" - no way!
    Super is all about saving to fund your retirement - not blowing the low tax dough on a trip/ car/ whatever, then expecting the rest of australia to fund your retirement by the aged pension.
    If you want a lump sum for a no-strings attached purpose like a trip or new car, then save it like everyone else, not pay a lower tax by putting it in super with no intention of funding your retirement with it.
    If you reckon the cost of insurance through your super mob is too high...simple! Don't buy it from them! Go somewhere else where you reckon there's a better deal.
    Sometimes I just don't understand.... A lot of folks expect to receive government support when they are aged, but also expect not to pay tax. Where does the money come from? Just print some more??
    Adrianus
    12th Apr 2015
    11:20am
    "SMF's can invest their super where they like...even in property!!!"

    Not senile Yet, You make it sound like SMSFs are not getting hit. Yes they can diversify within reason and within the prudential guidelines. Bear in mind that property can also attract a state government land tax. Most SMSF trustees have proved that they can increase the balance of their fund much faster than a union controlled industry fund. This is a major reason for their popularity.
    Chrissy L
    8th Apr 2015
    5:09pm
    Another "sneaky" tax by this government - I will certainly check my Super Statements. Where has this been reported? How much longer do we have to tolerate this kind of behaviour to Seniors and Pensioners? Enough is Enough!!! Roll on the next election!
    particolor
    8th Apr 2015
    5:18pm
    It reminds Me of landing on Super Tax on the old Monopoly Board !! :-(
    FrankC
    9th Apr 2015
    3:53pm
    I have just checked my last statement from HESTA, and my admin fee for the year was $60.00 yes $60.00
    Adrianus
    12th Apr 2015
    11:43am
    Chrissy L, I have no desire to embarrass you but, I hope you were complaining back in 2012 when the Gillard government was making these changes? At the time, the Superannuation Funds of Australia opposed the unnecessary additional administrative arrangements, saying it would add a cost of around $10 pa to each member's account.
    Pass the Ductape
    9th Apr 2015
    2:52am
    If banks are going to charge a government fee for every deposit, does this mean pension payments will be part of the deal?
    Tim@toc
    10th Apr 2015
    8:21am
    You can bet your life that will be so.
    Desiree
    16th Apr 2015
    11:02am
    Start you own super fund. We did and haven't looked back. Check for penalties though before you do.


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